Most of the persons in the UK use the term savings and investment interchangeably. Wait! There is land and sky difference between these two terms. And the one who knows the difference can become rich. It depends on how you look towards the money.
For a person with poor financial condition looks a pound as a pound. They will spend that money to purchase something. But for a person with strong financial condition look a pound as a SEED that can earn a hundred more pounds.
You can sense that how you see the money represents what is best for you. Still, people confuse the term saving and investment. This is the reason why we wrote this blog and discussed which one is best and covered many other crucial points too.
Now, let’s start…
Difference between savings and investment
Before, we jumped to the concept of which one is a better investment of savings. Let’s understand the difference between them…
- Savings: It is the amount that you cut down from your salary or monthly income. The motive behind this is to achieve short or long term goals such as buying a house or car. It may exhaust some unexpected emergencies. It means, there is no surety that with savings you will able to catch your dream.
- Investment: In this, buying stocks, bonds, and mutual funds or in real estate in which you can hope that you will earn more. Investment means to invest money in the hope of getting more. Those who invest have to wait for a long time for the best return.
Hope you understand the difference between savings and investment. Now, let’s study on should you invest or save money?
|INVESTMENT VS SAVINGS MONEY|
When you have extra bucks, then you can do several things. It depends on the goal whether it is long term or short term. You may save money to cope up with various financial situations. However, there are several options that can help you to manage the expense such as a loan. There are many other ways too but you may receive instant help from online lenders in the UK. They provide different assistance which you may not receive from traditional loan providers. Direct lenders provide very bad credit loans where you can get instant approval at a competitive interest rate even with very poor credit history.
But! Saving has its own importance. You cannot overlook it. Now, ask this question to yourself that
What you should do to boost your wealth?
At that moment, spending money won’t give you extra bucks. Now, here you will sense the importance of investment. It denotes that saving and investment both can be beneficial but it depends on your goal. It may create a paradox. Right?
This is the reason we have simplified it so that you can easily find out which one is the best at what time.
The right time to save
If you are the one with zero savings, then you should go for savings. Many such situations occur where you need instant financial help. At that instance, savings can be the saviour for you. If you think that investment is better, then you are wrong.
For example, you have put money on stocks but there is no proper algorithm that you will get the best return on the next moment. The stock value may rise again if it falls but it will take time. It may be a day, months or years.
You have to predict which one you have to choose.
The right time to invest
No one in this world wants to live a financial bound life. You have to raise your wealth to live a more comfortable life. And boost money you have to spend it but what is the right time?
As we have discussed that savings should be your priority. You should at least save money for six months. You do not have an idea of what will happen tomorrow, that is why savings are important. Once, your instinct that you are prepared to cope-up with any surprising expenses, and then you are ready for the investment.
Loss and profit are the two sides of the investment. You may receive the fruitful result at one night or may face some terrible losses. So, it would be better that you make yourself ready for any kind of loss. And never expect a return in a short time.
Start with a small amount and once you understand how the market works, then you can play for the big one. If you want to invest without disturbing your financial plan, then external aid can be an ideal choice for you. You can opt for unsecured loans where you can get a small amount without providing any security. Now, you can use them to build your wealth.
We hope that you understand the importance of investment and savings. Both are crucial parts of our life BUT it depends on your vision.