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Saving money is not equal to investment





It is a common misconception that saving and investing are the same thing. Many people are taught about saving money in high school.

While you save your money, it's positive action on its own but it doesn't grow your money in the same way as investments. Savings earn relatively small returns and almost no interest, which means your saved money won't grow at all if you just stick it in a jar. As soon as you put your money into a savings account, its value becomes fixed, meaning you won't benefit from any potential future increases in the market value of shares or bonds.





The main difference between saving and investing is that while saving involves putting your money away and expecting some interest, investing means putting your money into stocks, bonds, mutual funds, cryptocurrencies, and other places to increase your gains in the long-term by risking some of what you have to potentially make more in the future and expecting a return on the investment. In other words, investment is the use of money to make more money, in other words, building your wealth.




When we do keep money in the bank, low-interest rates will not keep pace with surging inflation rates. For the last 10 years, we have seen a big decline in interest rates and real return on investment.

Investing is a long-term process and it is not necessarily about making money quickly. It's about securing your future and achieving financial freedom.

Start by setting up a budget, and make sure you include an allowance for savings. Determine what your current assets are worth and how much you need to save each month to invest and reach your goals.
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