How to grow your money. Investing vs. Saving
- August 28, 2017
- Posted by: Quarles Business and Financial Strategists
- Category: Financial Advice
How To Grow Your Money. Investing VS. Saving
So you have worked hard, and now you have a little bit of money behind you, but what do you do with it? Should you look at investing it or just keep saving it up? What is the best way to grow your money?
These are important questions to be asking, especially if you want to increase your finances smartly and securely. It can be a complicated question, and there isn’t a simple answer. Every individual’s financial situation is different, so it is important to make an educated decision.
Want to know more about the differences between investing and saving? Keep on reading to learn the best way for you to grow your money.
Savings Is A Financial Investment In Yourself
We all have a basic concept of savings. You put money in the bank, don’t touch it, continue to add to it and then over time you have saved a substantial amount of money. Seems simple, Right? To save wisely and successfully it takes a bit more than just putting money away for a rainy day.
Savings is a long term financial investment in your future. It requires you to be diligent in your day to day finances and budget. Also, you need to be educated about your savings. Compare different banks and the interest rates they are offering. Don’t just rely on the money you are putting into the account. Do your research and find a bank where you can earn interest on your savings.
Choosing to save, whether it be to have an emergency cash fund, a holiday, a house or retirement, is a long term plan. It is not going to happen overnight and will take much dedication from yourself. However, it is the safer option for growing your money.
Success Stories: SMSFs and Retirement Planning
Is Investing For You?
Investing is another option for growing your money. Some people invest in the stock market, others in properties and businesses. Investing can provide better returns in the way of profits, than savings. However, with greater reward comes greater risk.
If you pour all your money into one investment without doing the right research and weighing up the risks, it can potentially lead you to a loss of money. To lower your risk, it is good practice when investing to diversify. This means to spread your money over different types of investments rather than just one. That way if one investment takes a loss, you should hopefully be still making a profit on your other investments.
There is the potential to substantially increase your money through wise investing. We have all heard the rags to riches stories of young 20 somethings who made a few smart investments and are now retired at 30.
Success Stories: SMSF Property Investment
What Is The Best Option For Me, Save Or Invest?
There are a few factors you should consider when deciding what you should do with your finances. It depends on your financial situation and goals. Here are just a few of the questions you should be thinking about before deciding.
Are your finances secure? Do you have any unpaid debts and do you have an emergency fund with at least three months of wages for emergencies? Take care of these things before looking at savings and investing.
What is your goal? Do you want to go on a holiday, buy a house or maybe just have money for retirement?
Is it a short, mid or long term goal? Depending on how soon you need the money you can gauge which option will be best to grow your finances.
There are pro’s and con’s to both options, and with so many other variables it can be a very complex decision. However, when it comes to your financial future and security, it is best to be educated to make wise and profitable decisions.