Saving money versus Investing money - emilinda

Monday, April 2, 2018

Saving money versus Investing money


Saving money and investing money are entirely different things and fundamentally different financial concepts. They serve different purposes and play different roles in your journey to building wealth and financial independence through Malaysia property investment.

Definitions
Saving money is the process of putting cash aside and parking it in a no-risk and liquid securities of accounts. This can be savings accounts of current accounts. The defining feature of savings is that the cash reserves must be there when you need them. They must be available to grab, take hold of, and put to use immediately with minimal delay and repercussions. Your primary consideration for money should be capital preservation.

Investing money is the use of your money as capital to buy assets with good probability of generating safe and acceptable rate of return (or return on investment) over a period of time. Although this might suffer from volatility and elephantine economic uncertainty, it helps makes you wealthier in the long run. Your primary consideration is that your investments need to be backed by some sort of margin of safety. These can be in the form of stocks, bonds and real estate.

Short term vs long term
Saving money achieves short-term goals in the near-future. They are typically for smaller purchases, such as for going on dream vacations or having money set aside in an emergency fund.

Investing money helps you achieve bigger, more long-term goals. It also helps you build long-term wealth. Think of things like saving for retirement, or your child’s university education.

Accessibility
Savings can be accessed any time you need it. Although many savings accounts have a limit of how much and how often you can take your money out, you cash is liquid and readily accessible.

Investments are not as easy to access. Once you have made an investment with your money, your money it is tied up for a period of time. If it is something physical, such as a house or art collection, you won’t get cash until you sell off your assets, which could take up an innumerable amount of time.

Risks
Savings accounts generally has minimal or no risk. Your funds are insured and safe. If anything ever happens to the bank (which is highly unlikely), your money is safe and sound.

Investments on the other hand, have a higher risk. Stocks and bonds are high-risk investment vehicles that offer the potential for high returns. The downside? You may lose some or all of the money you have invested. Real estate investments having the lowest risk involved and you can look into Malaysia property investment.

Potential for profits
Savings accounts generally earn lower interests. Low interest rates mean low returns. If you are considering leaving your money sitting in an account for more than a few months, you may want to consider other types of accounts. You can do more with your savings by putting it in a fixed deposit account with slightly higher interest rates. However, do be wary that if you withdraw any money from the fixed deposit account before the maturity date, depending on when you withdraw it, you may lose further interest lost. Furthermore, the interests generated will still be substantially lower compared to other investment vehicles.

Investments have the potential to generate high rates of return. Furthermore, you have multiple investment vehicles to choose from. The key to a successful investment portfolio is a diverse portfolio. Your investments will earn money through interest, dividends and capital gains. Your investments may appreciate in value over time, depending on if they are able to outpace inflation. Your investments thus positively increase your net worth. If you have an exit strategy in plan and sell for a higher price than you initially invested, you will end up making a profit.

27 comments:

Eintan Nurfuzie said...

1 day nk buat saving juga gunakan property.. skrg masih dlm bertatih lg.. hibi

jessie koo said...

Oh really not easy to save. Really have to make effort to save for investment. Thanks for reminding

amirnawawi said...

Ya. Sekarang kita memang perlu saving so that hari tua kita nanti terjamin.

Zaman sekarang yang kian mencabar pastinya memerlukan perancangan kewangan yang teliti.

zaza iman said...

Yela kan emi.. Kewangan skg kena kawal betul2 dan buat saving.. Kalau tidak. Hmm

yoorin melacolea said...

both are important too.. but i choose saving. ramai orang simpan emas as investment jugak kan..

irra yyan said...

Duit berkepuk boleh invest. Macam mommy tak kerja, simpan. Pastu nak guna, guna. Hehe

ina said...

dunia sekarang,memang memerlukan pelaburan. Nak tak nak,kena la juga melabur.Manfaatnya sangat banyak,tak rugi lah

Kylie wenn said...

bestnya boleh saving dan invest... money memang important.. got enough money can do a lot of things

shamiera osment said...

Investment does important..but still dont have a chance to invest in anything..still working out in surviving phase..sigh~

Amanda Suria said...

Investment memang penting..masih belajar bab pelaburan..buat masa ni x leh nak focus sangat lagi sebab banyak komitmen..

Cindyrina Rina said...

I prefer conservative way of investment. Play safe. I don't like high risk or volatile kind of investment.

Shesyira As said...

Ya dari muda should start ada kesedaran nak invest money untuk masa hadapan.airah pun masih mencari medium investment yang sesuai

Mimi Azirah said...

Bagi akak kedua duanya ada pros and cons nya. If tak berkemampuan melabur,savings dahulu. Bila savings dah stabil, boleh guna savings untuk melabur tapi pada tempat yang betul dan diiktiraf

Diana Rashid said...

Orang muda sekarang dah mula buka mata hal2 pelaburan macam ni..Bagus la..Sebab benda ni kena buat dalam jangka masa panjang , kena ada komitmen , baru nampak hasil.

Precious Cla said...

Tak rugi belajar tentangnya hal ni^^ klu da arif blh jadi Kaya Kan hehe

Cahaya Hayati said...

Akak buat dua2. Saving dalam th/asb/asw dan investing dalam public mutual, cwa dan juga kenanga... Sikit-sikit dengan harapan boleh guna masa bersara nanti tanpa susahkan anak2

hafizsidah said...

simpanan dan pelaburan..mmg kedua2 ya penting ..tq sharing sis

Mrs Liez said...

Mmg investment perlu selain saving.. but make sure tahu kebaikan dan risiko

Nik Khazami Nik aziz said...

"Saving money is the process of putting cash aside" masalahnya selalu terguna duit tu. hehe

AyuArjuna BiGoshh said...

good info. thanks for sharing this,,,hati kena kuat dan konsisten klu nak mula menyimpan

atiehilmi dot com said...

good info dik.. hee~ walaupun kakak surirumah jek tapi kakak menyimpan juga untuk diri sendiri.. memang kena kuat sikit la.. sebab keutamaan bukan lagi shopping..

Abby Onety said...

Saving money memang sangat penting untuk menikmatinya di hari tua. Perlu kita merancang sejak dini agar hari tua bisa terjamin.

tenku butang said...

siapa yang pandai buat duit melalui property memang bijak.. dapat saving duit dengan mudah je.. cuma nak beli property tu masa mula-mula agak memerlukan modal yang tinggi

Hanny Abdullah said...

Merancang kewangan memag perlu sangat. Sis buat saving and ada juga lah investment sikit2. Tak tahu hari tua kita macam mana...so memang kena sangat beringat2 dari sekarang

sya mimie said...

Saving.. erm.. perkara yang sangat penting untuk masa depan kita semua kn.. kna pndai caranya.

Sunshine Kelly said...

Well, both ways! Save money to get the capital first then only use it for investment. I think long term investments are more secure, like property.

seri wangi said...

Bagus buat perancangan dari usia muda bila dah mula bekerja tapi kalau kita mempunyai tanggungangan mestilah susah sikit namun begitu terpulang kpd kebijaksanaan kita merancangan.