Correlation between saving and investing

[Mika]

Do you know what the main difference between a rich guy and a poor guy is? Well, whenever the rich guy has money, he will invest, and when the poor guy has spare money, he will save. This might not be true in all cases, but this is what happens in most cases.

Rich people can take a risk of investment, whereas poor people look for financial security without taking a risk, therefore, they save.

There is a correlation between saving and investing. You can save to invest or invest to save. Sometimes investing will save you money and sometimes saving will become your investment. Let me exemplify.

You buy a house (you invest). You move to your own house and stop spending on rents (saving money on rents).

You put your money in a fixed ban deposit (saving), after the end of the fixed deposit term, you will receive your principal along with the interest on your deposit (return on your investment).

Saving can help you in difficult times, for example, if you have saved, you will have money when you need it for an emergency; however, you can grow your assets and improve your net worth only when you invest.

One of the best ways to build funds for investment is by saving money. You save money for some time and then invest it.

 

[Jasz]

The relationship between saving and investing is complex. By and large, the more you save, the more you're able to invest. However, there are a number of other factors to consider, including how much you've saved in the past, your level of debt, your income stream, and even your outlook on life!

For example: if you have a lot of debt, it can make sense to invest what little savings you have so that you can increase your income (and therefore decrease the debt-to-income ratio that lenders look at when evaluating your creditworthiness). But if you don't have any debt, it makes more sense to save money by keeping it in cash-equivalent accounts like savings or checking—and then invest what's left over.

In general: the ideal balance between saving and investing depends on your personal financial situation. The more risk-averse you are, the more likely it will be that you want to keep most of your money in cash equivalents instead of putting it into stocks or bonds. On the other hand, if there's an opportunity out there that really appeals to you but requires some capital up front as an investment (like starting a business), then exploring options for raising funding through investors might be worth considering.

 

[Kendy]

The relationship that exists between saving and investing is that, they both share the same aim which is to actualize a purpose. At times, people do frown at the act of saving money in the bank as they consider it a waste of resources because it does not grow or add substantial interest. Before an investment can be made, it passes through the act of saving. Without money that was saved either from your personal banking or from loan companies, a business idea or investment cannot be brought to reality. Savings is a pathway to have an investment.


Presently, I have a target to start my proper savings from next month so I can start up something for myself by first acquiring both an offline skill and also an online skill. Investment is only achievable when you have some savings to utilize this is why the culture of saving money should be harnessed. There are many people who would want to save money but there is no financial ability and no hopes for investing. This correlation exists because they are both rooted together. There is no one which is superior than the other because the both serve their different purposes.

 

[Abigael]

Saving and investing are two very important actions to take for sure. But it seems that investing is the best thing to do if you want to gain wealth and grow rich. Investment is what most rich people do, the take the risk and end up earning good profits. But most poor people fear taking risks.

Saving is very important for everyone's financial stability. Therefore, people should fully embrace it. Especially having a savings account for emergencies. That will save you alot when accidents and abrupt illnesses happen. Moreover, it is great to have insurance covers for your health, life and properties.

Investment is an important form of saving. When you invest, you increase your streams of income and that can make you so wealthy and financially stable. In this economy, you cannot depend on just one source of income. You need to have several streams of income in order to live a comfortable life. And investment gives you just that.

So as you struggle to save money, make sure that you also invest some of it so that it can earn you passive income. Hence you increase your streams of income and live a life that you afford most of the things you need/want.

 

[Ithedicious]

There is no how you are going to say it , investment will definitely be profitable and that is what a lot of people do not understand .

people believe that if they are saving their money in the bank their money will always be there and the full value of the money you will still be in the bank , well that is just true to them but that is not the best to me because I just consider saving in the bank to be a pure waste of time .

I could have used that money I am putting in the bank don't want to invest in something to generate me some interest and monthly or yearly depending on the type of investment I have chosen to do .

The point is that so many people are earning less than what they are expecting and as a result , they might likely have little money for investment and they may not be able to invest such amount of money since investment generally will require that an investor's needs to have a huge sum of money.

That is just the only disadvantage I know . But investment will always be profitable .

 

[Jasmine]

In order to invest, you need money. You can got money for investment in multiple ways, for example your own money (that you inherit from someone, your savings, and the money made by selling assets), loan (burrowing from banks, financial institutions,or friend and family), through fund raising, etc. If you do not want to get loan and do not want to take a pain of raising funds or think getting a loan is too risky the only option you have left is your own money. If you do not have lot of savings, if you have not inherited money, and if you do not have any assets to sell to raise money, how can you start investing. In order to save money and in order to build your investment, you might have to continue to save for a long time, not 1-2 years but might have to save for for 5-10 years. Can you wait that long to build your desirable business? However, if you have heard about compounding interest, you might be able to build your saving faster. In order to do that you should start investing any amount you have and you should reinvest your return on your investment.

 

[Shigobad2020]

Do you know what the main difference between a rich guy and a poor guy is? Well, whenever the rich guy has money, he will invest, and when the poor guy has spare money, he will save. This might not be true in all cases, but this is what happens in most cases.

Rich people can take a risk of investment, whereas poor people look for financial security without taking a risk, therefore, they save.

There is a correlation between saving and investing. You can save to invest or invest to save. Sometimes investing will save you money and sometimes saving will become your investment. Let me exemplify.

You buy a house (you invest). You move to your own house and stop spending on rents (saving money on rents).

You put your money in a fixed ban deposit (saving), after the end of the fixed deposit term, you will receive your principal along with the interest on your deposit (return on your investment).

Saving can help you in difficult times, for example, if you have saved, you will have money when you need it for an emergency; however, you can grow your assets and improve your net worth only when you invest.

One of the best ways to build funds for investment is by saving money. You save money for some time and then invest it.

I understand your point of view and i am really going through the same thing right now, there's and adage that says the riches people will continue to get richer while the poor might stay poor if care is not taken ,

The reason why the rich people keeps investing is that they have everything they want at the Palm of their hand , they don't need to think about foodstuffs because they have more than enough in bulk at home because they do bulk purchasing and they also have extra fund in their account incase of unexpected spending ,

So its easier for them to invest than the poor people because the poor only eaen peanut , and some of the peanuts will go for foodstuffs , electricity bills , house rents and other responsibility , the little left sometime might be needed to pay the children school fee , so they will rather save it than invest because they will be scared of loosing their last hope on investment if it turn out to be a scam investment.