“Do not save what is left after spending, but spend what is left after saving.” – Warren Buffett
Are you one of those people who think saving and investing money are the same? If yes, then you’re not alone. Unfortunately, many people fail to see the distinction between saving and investing, thinking they are the same. However, these two concepts are completely different.
Difference between Savings & Investment
What is Saving?
Saving money, you are putting it aside for a rainy day. Saving money is like nurturing a child, caring about it and being careful and conscious about spending it, at times sacrificing for a better future. Your focus is not returns but just accumulation.
At investbazaar, we help you to make the right decisions we understand our client requirement and make the distinction between saving and investing and help you a secure platform for investing as well as superior return on your savings and help you make the most of your money by generating the best returns in proportion to your risk appetite.
Saving is a difficult habit to form and even more difficult to maintain. It requires a lot of Self-discipline and commitment. With easy access to funds, it can be tempting to indulge in impulsive spending. Saving habits must be inculcated in kids since childhood via recurring saving bank account or small SIP (Systematic Investment Plan) of Rs. 500. Which not only instills a good habit in our kids of saving but this also adheres to the golden rule of investing for the long term.
In India, our parents and grandparents have always placed a strong importance on saving money for their children’s future. This was what motivated them to never touch their savings unless it was absolutely necessary. However, with the rise of millennials and Gen Z, this perception of saving is slowly fading away with the “YOLO” trend (You Only Live Once) and impulsive buying. Nevertheless, when we find ourselves in financial trouble, we often remember and appreciate our parents’ thrifty habits.
What is Investing?
Investing is allocating part of the savings to any asset class in anticipation of a better return. When you invest you are really putting your money to work for you. It can be a direct equities, mutual funds, bonds, a business venture, real estate investing, a real estate property or any other type of investment with a certain degree of risk attached. The general rule of thumb is that “the higher the risk, the higher the potential return”.
In earlier days, there was a very limited option of investing, therefore real estate, gold, fixed deposit, Kisan Vikas Patra (KVP), National Saving Certificate (NSC) were the couple of investing options. But now we have a plethora of investment options which churn out a better return. You can start investing in mutual funds with as little as ₹ 500 towards your goals with just a few clicks. There are a variety of investment products available that suit every investor, so you can find an investment that fits your risk tolerance and goals. All you must do is identify your goal, assess the asset, and make sure it fits your investment objective. If this feels overwhelming, we are there to help, you can take help from our experts who will do all the heavy lifting for you, our team of experts can find the right product to suit their needs. Our experts make an execution strategy after you identify your various financial goals in life, assess the assets risk as per your risk tolerance and make sure it is aligned with your investment objective and manage and monitor that you stay on course with your financial goal.
