Investing And Saving

Posted on September 1, 2010
Filed Under Investments | Leave a Comment

It has always been considered a smart move to set aside money for your future. But it is not always agreed about what exactly to do with that money. Should you invest your money in the bank where you know it is safe? Or should you invest it into things like the stock market?

Well that depends. Investing your money into the stock market and having it work for you has it’s advantages.

1. Long Term Growth

The main advantage of investing into stocks is that it comes with a great long term growth potential. In general, if you invest your money in a diversified portfolio of quality stocks or an ETF then you will most likely make a nice return in the long run. But if you follow smart stock tips and do your own research on companies then you can do even better.

2. Income

Investing your money into the stock market can also bring you some extra income. Dividend paying stocks for instance will pay you periodically throughout the year for each share of stock that you have. As your money grows and you buy more and more shares of stock it can turn into a nice income.

However saving your money has some pretty big advantages on its own.

The biggest advantage being that you know your money is safe. Stocks go up and down, if you invest your money into the market and the market crashes you lose all your money. However if you invest your money in a bank and the market crashes you will still be ok.

So is it better to save your money or to invest it? Actually doing a little bit of both is probably the best option.

Personally I like the idea of having a grand investment account that can grow into huge wealth over time. However it really isn’t something that you would want to start pulling your money out of tomarrow. Having a savings account for immediate emergencies and an investment account for long term goals seems like the best idea to me.

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