SAVINGS AND INVESTMENT CONTEST

in STEEM NIGERIA2 months ago (edited)
Let me start by saying that the difference between rich people and poor people is that the rich investment part of their income and the poor spend all their income.

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INVESTMENT
To invest is to allocate money with the expectation of a positive benefit/return in the future. In other words, to invest means owning an asset or an item with the goal of generating income from the investment or the appreciation of your investment which is an increase in the value of the asset over a period of time.

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Types of investments

  1. Stocks
  2. Bonds
  3. Mutual Funds and ETFs
  4. Bank Products
  5. Options
  6. Annuities
  7. Retirement
  8. Saving for Education
  9. Complex Products
  10. Initial Coin Offerings and Cryptocurrencies
  11. Commodity Futures
  12. Security Futures
  13. Insurance source

Classes Of Investment

1.owning a business (stocks):Buying stocks is one of the most common ways people start investing.
2.money lending (bonds and loans): Loaning money with terms and interest, buying bonds, or funding a peer loan are ways you can get into money lending.
3.real estate:Buying a home and renting it is one way you can break into the real estate market.
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My own understanding of investment

Investment to me means using part of your income to purchase or aquire item and hoping to get extra value of the amount spent in the purchase of that item. Putting money into use.

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SAVINGS
Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recurring costs. In terms of personal finance, saving generally specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is a lot higher; in economics more broadly, it refers to any income not used for immediate consumption. Saving does not automatically include interest.

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Type of savings

Savings is essentially cash, so there is only one type of savings in that respect. However, you can choose to keep your cash savings in various places, such as under the mattress or in a bank account. Bank accounts offer several types of savings products from standard deposit accounts to checking and money market accounts or CDs.
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My own understanding of savings

Saving to me means setting aside money for future use without considering the possibility of putting the money to good use and gaining extra because of the risk involved in investment. Savings to me is an idle money. Money not put into use.

Difference between investment and savings

CharacteristicSAVINGSINVESTMENT
Account typeBankBrokerage
ReturnRelatively lowPotentially higher or lower
RiskVirtually none on FDIC-insured accountsVaries by investment, but there is always the possibility of losing some or all of your investment capital
Typical productsSavings accounts, CDs, money-market accountsStocks, bonds, mutual funds and ETFs
Time horizonShortLong, 5 years or more
DifficultyRelatively easyHarder
Protection against inflationOnly a littlePotentially a lot
Expensive?NoCould be, depending on how much you buy and trade and realize taxable gains
LiquidityHigh, unless CDsHigh, though you may not get the exact amount you put into the investment depending on when you cash. Source

MY EXPERIENCE IN BOTH INVESTMENT AND SAVINGS

I bought shares worth #1200 in 2009 (Investment). Today, those shares are worth over #10,000(return of investment).
If I had saved that money, at the highest interest rate in Nigeria (1.5%), I would have had #1,413.51 by now.
Meanwhile, the average rate of inflation is 2%. Meaning that my #1200 of 2009 would have an inflation adjusted value of #1,491.98.
The effect is that my money would have lost value by #78.47 (#1,413.51-#1,491.98) if I had saved it, because of Inflation.And the is a huge difference between the return in investment (#10,000) and return in savings (#1,491.98).

**Please I used #sign to replace the symbol for NAIRA.
I also used the word "inflation", which is the rise in the price level of an economy. Once it increases the value of your money will reduce.

Conclusion

Savings can never make you get rich because inflation will always devalue it.when you are saving, you are making your bank rich. Only Investments is what makes people rich, this is because they grow rapidly than inflation (the higher the risk, the higher the growth).
Do not put all your money into the basket of savings. Invest more of it in real estate, shares, mutual funds or other sound investment.
Spending all your income is not #GOOD.
Saving from your income is #BETTER.
Investing from your income is the #BEST.

Thanks to @samsuccess for organizing this contest