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The Difference Between Savings And Investment

The Difference Between Savings And Investment
Wisdom Chimaobi admin

The difference between savings and investment

Before a man can embark on a journey of financial independence we must know The Difference Between Savings And Investment but first let us see what it meaning for some to gain financial independence.

Financial independence simply entails the ability of your income to exceed your needs as a human being a financially independent person is not just having the money to satisfy your basic needs it means being free from financial trauma.

Savings

Simply means keeping money, hard currency together to make it multiply drastically savings can be

Done in the bank, contributions, any platform in which money is consequently stocked not invested is called savings.

It is very important to make savings because it gives you the buoyancy to make big investments,

Most times, businessmen cannot expand their business because they lack enough money to do so because they never had savings.

Investment:

Investment simply  means using useful and available capital to produce a greater return any money that is put in a particular line of business to bring more earnings is called investment,

The difference between investment and e saving:

The investment brings long-term rewards while investment brings instant returns.

There is no risk in savings while investment can involve risk.

There is high liquidity of returns as cash can be gotten when needed.

You can earn interest from your savings in banks

Investment involves putting money to work to get money.

There is a high level of risk in investing in a business.

Making returns is not easy.

Reasons why people prefer investment to savings:

Even though both activities are positive means of getting more money but there are many reasons why students are taught to invest their money rather than saving it.

Investment is using money to make more money:

We invest our money so that we can be able to make more money, instead of keeping your money in one place once you should put into a moving business. so it can yield more money that is because the money you invested into a business will bring more profit.

Even while people say they are making savings the question is what are you making savings for?

In the end, they make savings to still start a business this is why investment is preferred to savings.

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Investment has a good chance to make you rich:

In this present world, people do investment that has the ability to make them reach in the nearest future.

If you are someone who prefers to save your money instead of investing them into a lucrative business you are preparing to make yourself not be rich.

Because net worth is not calculated with the amount of money you have saved in your account, the amount of money you can produce in a short range of time is monthly earnings.

The value of the investment you have shows how to reach you and you will become in the nearest feature.

Investment is for the future:

Saving is mainly to solve a particular problem investment is for the future, in the sense that we invest our money hoping to get a good result in future.

How much should one save or invest?

A person should be able to save and invest money that is capable to cover expenses like loan payments and bills even unforeseen expenses if not it is an effective saving and it is not worth saving instead you invest them or something no matter how little you start, you can add up any time.

The goal of making savings:

The main goal of making savings is to secure money without losing it, preserving its nominal value.

The goal of investing:

The main goal for investing is to create a room with the use of a certain amount of money called capital to provide a potential asset that can grow over time or a period.

It keeps appreciating and brings more returns

Reasons why people fear investment:

Risk:

A lot of risks are involved in making investments because it is not 100% assured that every investment you engage in will surely yield lots of dividends. There is a tendency that you can lose a good amount of capital while trying to get the right type of business that you are looking for.
Time:

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The investment we know does not give sharp returns it takes time for the venture to mature and produce a good amount of money.

This is to tell you that most people lack the patience to watch their business grow, they prefer to keep their money saved in their accounts.

Where to make savings:

Banks:

A bank is a financial institution that collects money from individuals for safekeeping and issuing loans as a means of part payment for the settlement of dept…

The bank is the surest way of saving your money in the old days people do save their money in pit, holes, for keeping them safes from robbers, the use of banks has made savings very easy.

One can save an unlimited amount of money in the bank without any fear of losing money it is a very sure way of saving money.

Money market accounts

Certificate of deposit accounts.

Contributions.

Bond. etc

Various types of investment opportunities in Nigeria.

Agriculture.

Petroleum.

Mining.

Manufacturing.

Real estate.

Tech.

The Difference Between Savings And Investment is saving is very good but it is better to invest your money than saving all of them because no matter how sure you are there is one thing, it is still possible that you can lose the money either by crook or hook and any money saved cannot appreciate.

Invest your money and make more money you will have to use all your necessary and available techniques to make more money and to

Mind you your net worth is not calculated by the amount of money you have in your account.

Rather the value of the investment you have.

 

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