Investing Vs. Saving 101: The Basics
People who are investing or planning on saving their money often get confused about the proper ways to do either one of these things, which one they should focus on, and how to do them properly. They are different from one another, have different ways that they are utilized, and it's important to remember that the stock market is an investment, not a savings plan. A lot of people 'save' their money in the stock market and use the money that they accumulate for things like retirement, but they have the potential to lose that money if the market goes down so it's technically not savings, but an investment instead.
Making sure that you consider all of the options that you have for investing and saving is vital, since there are a lot of differences and and choices. The only choices you have won't be whether to save or invest, though, since there are a lot of options in each one of those categories and what you're saving or investing for can make a difference, too. Depending on what you're investing or saving for, one option might work much better for you than another option would, so that's worth considering when you're trying to decide whether you want to save or invest, and in what.
Most people want to handle their saving and investing themselves and so they don't hire an advisor to help them, but they might end up regretting that when they make uninformed decisions that can hurt them in the long run. They can lose money in investments that are too risky, not get enough of a return on the savings that they have, or deal with a combination of those things, none of which will be helpful to them in the long run. It's usually assumed that getting an advisor is a good idea, since it can avoid the more serious problems that some people get into when they try to save and invest on their own with no expert advice.
In short, saving and investing are complicated financial issues that you really might not want to tackle on your own unless you have a lot of time to devote to learning about and studying all of the options that you'll have available. When you don't learn about all of your financial options you have the chance to miss out on something that could really be very helpful to you in the future and something that might have given you a really good return. A savings account at your bank and the stock market are not the only choices that you have for your money, and there are many choices that you may not have even considered yet, but they are all worth looking at.
If you're investing, how quickly you're trying to make money can have a huge bearing on what kind of vehicle you choose to invest in, because some are designed for quick cash and others are designed to be a long-term strategy. None of the investment options that are legitimate are going to make you rich overnight, but many of them can give you some return within a few weeks to a few months - but they are generally considered to be very risky. Going with a long-term strategy that will pay off years later is often considered to be safer when investing in stocks or bonds, but some people also invest in areas such as real estate, which can pay off much more quickly.
When you save, on the other hand, the rate of return is generally what matters most to you, and getting a savings account at your local bank might not be the way to get the best return. There are bonds and other securities, CDs, IRAs, and many other options for savings, and you can also diversify and put some of that spare cash into different things. Diversifying is one of the things that's highly recommended by most advisors because they know that it protects you in case one of your strategies fails - you'll still be alright financially because you have money in other places, as well.
Moving your financial life forward and keeping yourself secure generally means having a good mix of both saving and investing, but staying patient to see good returns is important, too. The dotcoms that helped people get rich quick are pretty much over and done with, so it's 'back to normal' for people who want to invest and make money. Despite that, though, it shouldn't deter you from working hard and from saving and investing your money in the right things with the help of a good financial advisor who will take the time to work with you.
Making sure that you consider all of the options that you have for investing and saving is vital, since there are a lot of differences and and choices. The only choices you have won't be whether to save or invest, though, since there are a lot of options in each one of those categories and what you're saving or investing for can make a difference, too. Depending on what you're investing or saving for, one option might work much better for you than another option would, so that's worth considering when you're trying to decide whether you want to save or invest, and in what.
Most people want to handle their saving and investing themselves and so they don't hire an advisor to help them, but they might end up regretting that when they make uninformed decisions that can hurt them in the long run. They can lose money in investments that are too risky, not get enough of a return on the savings that they have, or deal with a combination of those things, none of which will be helpful to them in the long run. It's usually assumed that getting an advisor is a good idea, since it can avoid the more serious problems that some people get into when they try to save and invest on their own with no expert advice.
In short, saving and investing are complicated financial issues that you really might not want to tackle on your own unless you have a lot of time to devote to learning about and studying all of the options that you'll have available. When you don't learn about all of your financial options you have the chance to miss out on something that could really be very helpful to you in the future and something that might have given you a really good return. A savings account at your bank and the stock market are not the only choices that you have for your money, and there are many choices that you may not have even considered yet, but they are all worth looking at.
If you're investing, how quickly you're trying to make money can have a huge bearing on what kind of vehicle you choose to invest in, because some are designed for quick cash and others are designed to be a long-term strategy. None of the investment options that are legitimate are going to make you rich overnight, but many of them can give you some return within a few weeks to a few months - but they are generally considered to be very risky. Going with a long-term strategy that will pay off years later is often considered to be safer when investing in stocks or bonds, but some people also invest in areas such as real estate, which can pay off much more quickly.
When you save, on the other hand, the rate of return is generally what matters most to you, and getting a savings account at your local bank might not be the way to get the best return. There are bonds and other securities, CDs, IRAs, and many other options for savings, and you can also diversify and put some of that spare cash into different things. Diversifying is one of the things that's highly recommended by most advisors because they know that it protects you in case one of your strategies fails - you'll still be alright financially because you have money in other places, as well.
Moving your financial life forward and keeping yourself secure generally means having a good mix of both saving and investing, but staying patient to see good returns is important, too. The dotcoms that helped people get rich quick are pretty much over and done with, so it's 'back to normal' for people who want to invest and make money. Despite that, though, it shouldn't deter you from working hard and from saving and investing your money in the right things with the help of a good financial advisor who will take the time to work with you.