To Save or To Invest; A premium bone of contention
It is beyond doubt, the bone of contention caused by this two subject matters. I must testify that I’m a witness of a live argument which resulted in a combat that was stirred by this particular conflicting subject matter. to save or to invest
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I equally have heard story of people who’ve been ruined on their quest of trying to choose between the two.
For few of us who may not have much insight on the subject matter, let me at this point introduce them to us in simple terms.
Savings in simple terms can be seen as the act of preservation, an act of reduction in cost or expenditure.
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Investment on the other hand can be seen as placement of capital in expectation of income or profit for its use.
At this point, let’s highlight the keyword “profit” as it would come in handy as we proceed.
My Experience
In 2018, I came to full understanding of crypto currency as I was a regular content writer of crypto related articles for contest here on Steemit which was organized by @originalworks. This experience gave me all the knowledge I needed to know about the crypto space and blockchain in general. Coins like bitcoin was worth about one million naira and Ethereum was about one hundred thousand naira. Coins like dogecoin had a very finite value (as it was not up to a kobo) but, from research; TA (Technical Analysis) and FA (Fundamental Analysis) I knew that in less than no time, they would all skyrocket. Funny enough I won a scholarship then of which I was buoyant enough and should have invested in one of the coins but instead, I was afraid of the risk of losing my money so I opted to saving it for the “rainy days”.
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Four years later the same bitcoin rose with over a 200% increase and had a value of thirty million naira while my money that was stored in the bank depreciated by more than 8% due to bank charges. My friend who was bold enough to invest made so much return that he’s now an employer of labor and unfortunately I’m one of his staff’s ohh, what a miss! That’s the same situation a lot of people find themselves, a cross road where they have to choose which choice to make, “to save or to invest”
Firstly, let’s look at it from this angle: The variation between savings and investment
| Factor | Savings | Investment |
|---|---|---|
| Risk | The only risk clearly seen in saving is theft | This can be seen as a major setback in investment, the probability of losing through an investment is greater ranging from devaluation of commodity, fraud etc. |
| Emergency | Savings can be easily amassed for emergency purpose | It is improper to amass an invested resource as this may lead to crumbling of business |
| Professionalism | It doesn’t take a professional to know how to save | It needs a lot of expertise as the slightest wrong decision could lead to an entire loss of resources |
The table above made it clear that both savings and investment have their individual negative sides. As a person, you’re not supposed to dive fully into one school of thought as to which is better amongst both. From personal opinion, I’d say that to save and to invest have their individual disadvantages as much as great advantages as such, one who has capital must take so many factors into consideration before taking a move.
Basic factors to consider
- Purpose: one must first understand the purpose of the resources at his disposal. He cannot claim to save a resource and have an immediate cause to use it. One who ventures into an investment must understand that it takes patience to wait until the minimum targeted profit is reached.
- Risk: from an angle of assessment, a good number of opinion would be that investment is preferred to savings considering the fact that there is a good probability of getting profits as returns on investment. The part people fail to consider is the risk associated with any investment ranging from fraud, devaluation, loss due to bad market bargain etc. As much as it is profitable to invest, one must assess the investment opportunity professionally to avoid unnecessary unforeseen loss of resources.
In summary, it is best that any forward thinking person should save, after having made good savings the next step should be to look for ways to multiply this resources. This must be done with full market TA and FA to avoid insurgencies.
Appreciation
Special thanks to @samsuccess for availing the community this enlightenment opportunity, I equally want to extend appreciations in advance to all who’ll be extending a hand of appreciation to this publication.