. What is the difference between the positive and negative side of savings and investments ?
Most of the people do not have the basic idea about it, as a result we have to depend on some other sources like internet, finance advisor, chartart accountant etc. For this reason most of the people are confused what to do with their leftover money after having pay their all expenditure. Here is some informations below........
. Differences :
Most of us start our savings from our childhood at home in our lock and key mini bank (container). It is the money we save it for any emergency to use. On the other hand Investment is totally different concept altogether because, in the case of savings, the money aside remains almost the same. But in the case of investments, we have an opportunity to put our money into other ventures and grow our wealth by compounding (rates/interests). The money is generated by investing it in Mutual funds, stocks, bonds, commodities, flats, vacant lands and others.
· Uses :
Savings means that we can use the money for emergency purposes whereas, an investment means it requires a venture to increase the original fund that we put in.
Investment requires a particular period of time which can be from a few months to several years. Which also helps us for Tax Savings
· Withdrawal:
Savings are much more easier to extract them from the bank and pay off any additional expenses. Investments, however, require some planning to spending it. If we decide to claim our money, it will not be instantly and is bound to take time and therefore. If we plan to spend our invested money, we have to plan ahead and have to wait until the last moment to withdraw it.
· Risks:
Savings have no risks because there is a very low rate of interest. But in the case of Investments, however, are subject to rise and fall in the value of the company/market/bonds we have invested in. The most unfortunate truth about investments is that it is totally depends upon the rise and fall of the market value.
· What to do ?
Considering the risk factors, most people go with normal savings instead of investments to avoid the risks, if at all possible. However, despite the risk factor, sometimes investment is the smarter choice. If we do not have to touch such money for more than 5 years, we should consider to invest it in a proper fund with long-term.
So the positives and negatives of both options help us to plan for our future. However, every body needs to check his/her own financial background and then make a plan for the investments.
Most of the people do not have the basic idea about it, as a result we have to depend on some other sources like internet, finance advisor, chartart accountant etc. For this reason most of the people are confused what to do with their leftover money after having pay their all expenditure. Here is some informations below........
. Differences :
Most of us start our savings from our childhood at home in our lock and key mini bank (container). It is the money we save it for any emergency to use. On the other hand Investment is totally different concept altogether because, in the case of savings, the money aside remains almost the same. But in the case of investments, we have an opportunity to put our money into other ventures and grow our wealth by compounding (rates/interests). The money is generated by investing it in Mutual funds, stocks, bonds, commodities, flats, vacant lands and others.
· Uses :
Savings means that we can use the money for emergency purposes whereas, an investment means it requires a venture to increase the original fund that we put in.
Investment requires a particular period of time which can be from a few months to several years. Which also helps us for Tax Savings
· Withdrawal:
Savings are much more easier to extract them from the bank and pay off any additional expenses. Investments, however, require some planning to spending it. If we decide to claim our money, it will not be instantly and is bound to take time and therefore. If we plan to spend our invested money, we have to plan ahead and have to wait until the last moment to withdraw it.
· Risks:
Savings have no risks because there is a very low rate of interest. But in the case of Investments, however, are subject to rise and fall in the value of the company/market/bonds we have invested in. The most unfortunate truth about investments is that it is totally depends upon the rise and fall of the market value.
· What to do ?
Considering the risk factors, most people go with normal savings instead of investments to avoid the risks, if at all possible. However, despite the risk factor, sometimes investment is the smarter choice. If we do not have to touch such money for more than 5 years, we should consider to invest it in a proper fund with long-term.
So the positives and negatives of both options help us to plan for our future. However, every body needs to check his/her own financial background and then make a plan for the investments.
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