Understanding Saving, Investing, and Reinvesting

[Mika]

In order to improve finances, you will have to save, invest, as well as reinvest. By the way, how does saving and investing differ? You can save money in a safe in interest bearing accounts. Keeping cash in a safe offers security, however, when you save money in accounts, you also earn interest. Since you earn interest or let’s say you profit, a lot of people confuse with saving in interest bearing accounts with investing

Investing involves buying assets, equity, etc. for higher returns. For instance, instead of keeping your money in a savings account in a bank, you invest in Certificate of Deposit or Bonds.

Reinvesting means using returns on your investment to further invest and grow your wealth.