Mika
VIP Contributor
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.
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.