The reasons why we invest and save our funds cannot be far fetch, as it's aimed at acquiring more wealth, having something to fall back to and having financial security, and although both seems great, yet they both have their downside, and today I'll be weighting them alongside each other in a bid to come to consensus as per which is better.
Saving: These is an act of putting money in reserve/aside for a particular purpose or just to have something to fall back to in the future.
There are various reasons why people saves, which range from Saving towards a project like house construction, school fee, food or unforseen needs that might arise, interest can be gotten from from savings when saved in a bank under the right canopy, but those interest are relatively low.
Investing: These can be tag to be the process of putting our money in a project, business and co that we believe in, with the hope of earning passive interest.
The main and only purpose why I believe people invest their funds is because they wish to get a large amount of interest in return from their investment, also most investment are for a long duration, because you've to be patience for the business invested in to yield/grow.
DOWNSIDE OF SAVINGS
Little or no interest rate: While one can only get a very low interest rates from saving in banks and the likes, there is no no interest from Saving at home or with a thrift Saving.
Lost/Reduction in the saved amount due to charges and inflation: In a situation when our funds are saving in such type of bank segment or with a thrift collector, then there are high Possibility that we won't be getting the initial amount we save, because the bank/thrift collector will certainly remove fees for helping you save guide your money, and aside that in a situation when there is inflation during the period when you've you fund in savings, that mean the value of money saved as depreciated because it can no longer afford the things it could before.
DOWNSIDE OF INVESTING
- Massive lost: Investment is a risk game, so the more we hope to get a massive interest on on investment is the same way it's possible to get into a massive lost when the business we invested in crash and the likes.
- Time: Although these might not seem like a big deal, but in a situation when you are in a point in your life where you needed and urgent fund and nothing is showing forth from the other places you try to get it, and you remember you've got a place/business you invest your money, but then you've to wait a long period of time before your money is being refunded back to you.
The above as listed point and definitions simply means savings is the process of keeping our funds for a purpose within a period of time and this act are mostly risk free, but on the other hand investment is done with the hope of getting a huge amount of interest from our invested amount, unfortunately these comes with a high level of risk because the percent of tendency to get interest is also they percent of being at lost.
WHY IS BETTER?
- Should we then because of the risk associated with investment then boycott investing?
- Should we then because of the possibility of being at lost due to inflation ditch saving our funds towards plans and project?
- Should we just spend money did way they come si as to be on a safer side from both the downside that comes with saving and investing?
These and many more are the questions to lingers in my mind and I'll appreciate if you can do justice to them by sharing your opinion in the comments section, as per;
- What do you?
- Which is better?
- How to properly manage our funds?
Posted Using LeoFinance Beta
Posted Using LeoFinance Beta
Posted Using LeoFinance Beta
