Saving vs investing

Discussion in Savings & Investments Plans started by Gelsemium • Apr 14, 2014.

  1. Gelsemium

    GelsemiumWell-Known Member

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    What do you consider to be more important, to save money or to invest money? Are the two connected or can we start investing while still in debt? I think that possibly investing makes sense only after you owe nothing to no one...
     
  2. thenextGeek

    thenextGeekActive Member

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    I look at it this way. In order for us to become rich through our investments which include different businesses, stocks, mutual funds and trust funds, treasury bills, and other investment vehicles, we need to save money first because in order to make money, we need to spend money. We can save money by earning more money, by availing discounts on supermarkets, learning to do different stuff so that we won't hire someone to do them for us, and many more.

    Both are equally important, and we can't really pick one over the other since the two of them are interconnected when we look at the financial side of things. I believe that saving is the first part to financial independence while investing is the second part.
     
  3. Denis Hard

    Denis HardWell-Known Member

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    Investing certainly is a risk worth taking. With savings, you won't get much in terms of interest accrued.

    Your best bet is to make a wise investment and start earning a little money which you can use to pay your debts if you have any. If you keep investing, you'll be making more and more and maybe then, you can place the money in your bank account as you think about how you'll invest that money so it can make you more money.
     
  4. Gelsemium

    GelsemiumWell-Known Member

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    I'd love to invest to be honest, but at the same time I don't have the capital or the knowledge to do it, so what can I do really? I fear that the little I have might be at a loss, so I prefer to let it sit quietly for a rainy day. I know that this won't make me rich, but better than losing it all.
     
  5. Lostvalleyguy

    LostvalleyguyActive Member

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    If you are still in debt, your savings or investments need to be paying off a higher interest rate than the debt is charging or you are throwing away your money. It can make sense, for example, to put away money for retirement if it is in a tax free account as you are saving whatever your current tax rate is. It can even make sense to borrow money to top up that account as you can often borrow at a lower rate than your tax rate.

    Investing is riskier than saving but it often pays better. I would suggest you begin with saving until you have a few months worth of expenses saved up. After that you can invest only if you are mentally prepared to lose the money.
     
  6. pipps

    pippsActive Member

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    Well, firstly you need to save money in order to invest in. You cannot invest money without saving it. So this question is a bit of a tricky one. I would always invest though, if I did have the money. You get more money than sitting in the bank
     
  7. Dora M

    Dora MWell-Known Member

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    I think if you can combine the two, you are doing well. It's forever a fine balancing act until you have established something more substantial and can relax a little if you lose a portion of your investment. But you will have gained a lot of experience by then and can estimate in which direction you are heading, deciding whether you should be investing more or saving for a while to make up for your losses or wait for a time when a bigger and less risky investment is a good idea.
     
  8. tomhardy

    tomhardyNew Member

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    The two options are important for run a life. But investment is most important than save money. Since, it can make extra money from your regular income. So, make happy to invest your money in some sites or software.
     
  9. jewel777

    jewel777Active Member

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    Investing is a better way to make your money work for you. Even though it may seem more prudent to sock your money into a savings account of some sort, the interest you accrue is very limited. If you wait until you are completely out of debt before starting to invest, that might take quite some time, time that could that could me more efficiently used to earn on your investments. That being said, you need to make wise investments, or you'll be in a worse situation than you're already in.
     
    #9Apr 16, 2014
    Last edited: Apr 16, 2014
  10. Gelsemium

    GelsemiumWell-Known Member

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    No no, there are no interests at all in a savings account and the interests we have the state takes half of those in taxes, it's ridiculous. The question is, what to invest in? Banks offer certain investments, but there is always a level of risk and a minimum "Buy-in" so to speak, usually more than what I have.
     
  11. Richiee

    RichieeNew Member

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    For starters, you can try investing in products offered by your bank. Their investments may come in the form of a mutual fund or a time deposit account. If I were you, I would make my emergency fund first so that you'll be better prepared for the rainy days. After you make your emergency fund, I'd suggest that you apply for a mutual fund next. A mutual fund is great investment vehicle for non-active investors because your money is being handled by trained fund managers and their main goal is to increase the value of your money.

    But still, diversification is key. And in order to further protect ourselves from the downfall of any economic market, we should place our eggs on another investment vehicles. This is where investing in stocks come in. Invest in companies that bring value, and are there for the long term. If you have the money to buy Google stocks then please do so. :)

    There are other things that you can invest at. Real estate is also another great option, or so I hear. It's still your choice at the end. :)
     
  12. Gelsemium

    GelsemiumWell-Known Member

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    Thanks for the advice Richiee, actually I was "offered" by my bank to invest in those funds, they show me that the interests are superior, but that the risk is superior too, so I preferred not to do it, but now I am reconsidering it...
     
  13. tomhardy

    tomhardyNew Member

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    In my other preference, you can invest money in high yield investment sites with you earn profit by using that sites. But, before invest money into that sites you must know how long run in online. In any case, when you found standard high yield investment sites after that you start your earnings through this site.
     
  14. Hedonologist

    HedonologistActive Member

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    You shouldn't have both significant savings and debt. The interest is going to to make you a net loss. Of course keep perhaps £500-£1000 by for emergencies, but anything over £1,000 should be used to pay off debt. Overall I would say you should have a significant chunk of savings before you look to invest additional capital.
     
  15. erik120

    erik120Active Member

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    Saving always comes first. Think of it as the foundation upon which your financial house is built. The reason is simple - unless you inherit a large amount of money, it is your savings that will provide you with the capital to feed your investments. If you’re not sure whether you should save or invest, the answer is probably both. It all depends on your goals and your financial situation.

    Everybody ought to have a certain amount of cash savings to hand. The rule of thumb is to have three months’ essential outgoings (things like rent and food) in an instant access savings account. This is called an emergency fund.
    The only time you shouldn’t save or invest is if there are other, more important things you need to do with your money like getting your debts under control.
     
  16. GemmaRowlands

    GemmaRowlandsActive Member

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    I do think that both are just as important as the other, however at the moment I am more into saving than investing. I am hoping to buy a new house in the near future, and this means that I have to have the money available for when it needs to come out of my account, whereas investments would be for the long term. I would have invested into my child's university fund, for example, and into my retirement, but just at the moment I feel that my focus needs to be much more in the short term, so that is what I am working on for now. I do enjoy saving, though, especially when I have something that is so good to work towards like the possibility of actually owning a home that I can call my own for the first time in my life!
     
  17. Gelsemium

    GelsemiumWell-Known Member

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    I think that it's a small percentage those that invest because investing requires something most people don't have: money to do it. And even if we have the money we should be willing to take the risk and have the knowledge to know where to invest. Sadly I never got into the investing world, but I'd love to.
     
  18. Denis Hard

    Denis HardWell-Known Member

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    The assumption most people make is that you need a lot of money to start investing. If you take a look around, ask the right people questions and so on you'll find that there are many investment opportunities which don't require you putting in say $10K at once.

    Take a look at the link below:

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    If you invest small amounts of money for a long time, you'll make more cash than you'd have made if you simply stashed it in a bank account and let it lie there.
     
  19. DrRipley

    DrRipleyExpert

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    I think both are equally important but savings a bit more of an attainable goal. Investing is definitely a good thing to think about but these things shouldn't be hurried or rushed into. If you don't have any good prospects yet then you shouldn't push yourself to find one. Just save and when the right opportunity comes then you'd at least have the money to invest in it, whereas if you rush yourself and tie your money up too early then you risk not having anything to invest when the right opportunity comes along.
     
  20. Gelsemium

    GelsemiumWell-Known Member

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    That is a fact because most people simply can't save enough, we just spend all we have in the day to day. So, when we have some extra money we get a special treat for us, a trip, clothes or something like that. I think that to invest we need to have a lot of spare money to consider it, it's a whole new world to most people I imagine.