Savings is a process of parking hard cash in extremely safe and liquid securities. The aim of the savings should be preservation and getting some returns if possible. Savings are smaller short term goals in the near future like vacation, emergency etc. Typically no risk involved interest on your savings.
Saved money can be useful to us in case of an emergency in the future. If you save today, you may have to work the entire employment circle, life time in the future. Saving money available when we need it. Savings is setting money you don’t spend now for emergencies for future purposes. It is to secure your money without losing its value. Savings should be enough cover loan payments, insurance, etc. If we save in a bank account, we get 4 – 6 % interest and in a fixed deposit we get 8 % interest. The economic situation in India, the inflation is 4.55 % per year and increase our family related expenses and loans.If you save today, you may have to work the entire employment circle, lifetime in the future.
But investing is a process of money to generate a safe and acceptable return over a time of period. Investment involve putting cash to create wealth for achieving long term goals like education, house. The investment risk involved is high. If you have a potential to yield higher returns.
It should be enough for any specific purpose that will require a large corpus of find in 5 to 10 years. It give your assets, the potential to grow over a period of time. You are willing to take a risk while investing. It is buying assets such as stocks, Bonds, mutual funds, real estates
It carries a long term horizone. It is important to invest wisely. Understanding different investment vehicles, To start investing at a young age. But it’s never too late. Many investors are always on the look out for top Investment plans. Where they can double their money in few months with little or no risk.
Investment products that give high returns with low risk do not exist. Risk and returns are directly related. There are two buckets that investment products fall into financial and non financial assets.
- Financial assets can be divided into marketing products( stock, Mutual Funds)
- Income products( public provident fund, Bank fixed deposit )
Non financial assets are likes of gold and real estate. You should choose the correct asset classes and invest the money. Make money work for you, let money make you money for you.
Money should not saved in banks as saving or fixed deposit. It should be invested in mutual funds, systematic investment plans. Let invest the money work for you in a long time. something that put money in your pocket is asset. Find out the assets. you should save the taxes.