Investing Vs Saving
It is always a wise idea to set aside some extra 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 forget about the bank and put your money into something with a little bit more potential like the stock market?
Well, this depends. There are plenty of advantages of investing your money into something like the stock market and having it work for you.
1. Growing Your Money Over The Long Term
Of course the first advantage of investing into things like stocks is the long term appreciation that comes out of it. In generally if you invest your money into a market ETF you can make a decent return after so many years. But if you follow smart stock tips and do research on the companies then there is no limit to what you can achieve.
2. Income
The second advantage of investing money into the stock market is that it can give 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 there are some advantages of saving money into a bank as well.
The first benefit is that you know you will not lose your money. 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 put your money in the bank it doesn’t really matter what happens in the stock market you know your money is safe.
So, what is better saving your money or investing it? Actually doing a little bit of both is probably the best option.
Investing your money into something that has long term potential can be a good thing. But, it is not something that you want to start pulling money out of tomorrow. Having a savings account for immediate emergencies and an investment account for long term goals seems like the best idea to me.