saving vs. investing
Saving money can be easy to understand, but it’s not the only option you have when it comes to your money. If you’ve got a good handle on your savings and debt, now might be a good time to look at investing your money. So, what’s the difference between saving and investing? We put together a helpful infographic to show you.
what is…
…saving
money saved over time for short-term personal goals, like building up an emergency fund, or making a down payment on a house or a car
…investing
using money to buy a financial product or asset, with the intention of letting it grow in value over time, for long-term goals like retirement
what are some examples of…
…saving
· traditional savings account
· money market accounts
…investing
· stocks and bonds
· 401k plans, IRAs and mutual funds
· real estate
what are some pros of…
…saving
· inexpensive, quick and easy to start
· minimal risk
· you can usually access the money as soon as you need it
…investing
· potential higher returns compared to saving
· money could grow more quickly
· some investments may offer tax benefits
what are some cons of…
…saving
· returns on money are low
· money may decrease in value over time due to inflation
…investing
· can be expensive to start
· investments can decrease in value
· can be risky – returns aren’t guaranteed and funds aren’t FDIC-insured
Remember: there’s no one-size-fits-all approach to your finances, but it’s important to look at your options and do what’s best for you and your family’s financial future.
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