Savings vs Investment by @lhorgic

I want to specially appreciate @STEEMNIGERIA admin and @samsuccess for his awesome contest.its my pleasure to be part.

Here is a very interesting subject that if not we'll understood would lead to a huge misconception. Many today even mistake saving for investment,anyways those two terms are not the same,they function differently,your understanding about these two term can determine how financially stable you will be.

Saving with regard to finance can be defined as an act of setting aside a particular amount for a particular purpose.This is done in such a way that ones earning is not squandered at a goal,the money set aside can be used to settle needs as they arise and it can also be used in a case of emergency,this is possible because you have direct access to your money even when you save it,it's is saved because you know there will be need for it and that it should be able to meet needs at at when due,hence the unrestricted access.

Investment on the other hand is the act of keeping your extra earning(usually cash) or storing something valuable by converting them into assets,shares,stocks,real estate etc with the believe that those things will appreciate over time and also increase in value exponentially. One key thing to note with investment is time,for you to get remarkable value from investment you should be able to invest your time along with it...it's a long term venture. A good example is Land,converting your hard earned money into purchasing of a land with valid document will give you a very appreciable return in a year or two expecially in an area where development is rapid.

Investment has growth potential,what I mean by this is that,any viable shares ,stock or asset you invest in has the ability to scale up in value compared to what you put in initially. I will still love to use the example I cited earlier on (land). If you purchase a land in lekki,Lagos Nigeria this year for 20,000,000 even without having plans to build it, by the time you decide to dispose the land in 3 years time,that land would have trippled it value,why,there is a demand to get land in that area by the high and mighty and beside that, land appreciate with time naturally.

Risk is another feature we need to look at,there is little or no risk in saving the only notable risk associated with saving is that the value of the cash can fall due to inflation while in Investment,there is risk,you can't minus or subtract risk from investment,it is part of the package. The code is this "the higher the risk,the greater the profit and vice versal". This is indeed dicey in the sense that in some investment you can hit it big and some others might just turn out to be a failed investment whose loss can ruin a man who doesn't have in-depth knowledge about investment.This is the reason why expert says "don't invest what you can't risk/let go"

Investment is always on a long term basis,that is why you are not advised to invest what you're to live on, investment is not meant to be done with your daily feeding allowance,nor your daily transport fare to work or the amount used for general daily upkeep... investment should be out of your spare,after you must have removed everything you need to be comfortable as human being,so you don't end up a "Potential rich begger". While savings on the other hand is done with a short time frame. E.g I can save today what I will need next week,this kind of need is immediate compared to that of investment..

Investment has a huge role in saving you from inflation whose effect is to bring down the value of money as a result of too much money in circulation,you can preserve naira presently by investing in currencies that are strong like USD,EURO and cryptocurrencies (coins) ,it will help preserve the value of naira even when it's falling while Saving on the other hand cannot save you from inflation because the currency is either in hand or at bank,even bank these days don't help you grow money,infact return on fixed deposit are now very ridiculous. As long as it is with you,it can be easily and adversely affected by the economic situation.

ROI simply means return on investment. Only investment has the ability to give you this and it mostly calculated in % e.g 50% 70% 100%, the higher the percentage,the higher the return. It is also important to note that the higher the percentage,the higher the risk and vice versal. While in savings,there noting called ROI because the money wasn't used for anythings that can bring future returns.

I've benefited from both I must say. Investment has help me grown my money exponentially. A good example is with my investment in steem,I bought steem with cash when the value was extremely low,I believe that's the best time to buy as you enjoy the return when it's begins to rise. There's is something very certain about steem,it's has the potential to rise. I will also mention at this point that we have to be careful of what we call investment,not all are Investment,some are scam,I experineced one some months ago, permit me to witholdthe name of the platform, the ROI attracted me infact I borrowed to invest in it only for it to fold up just about 3 week after I joined. The only thing I was happy about is the fact that I didn't invest a very huge amount,it would have ruined me,the amount it has yielded so far and the amount I invested all went..it was painful. I have learnt to watch out and carefully observe what people call investment,ROI can be deceptive. Be wise!

Having compared both savings and investment I will like to conclude saying both are good, choosing one above the other isn't really the final and the best when taking into consideration your financial situation,if you're struggling to make ends meet or to feed daily,investment is not your best bet for the moment because you have barely nothing to spare and in addition,it's risky,what if it doesn't yield as expected what would happen? you should look into savings to help sustain you for the present but don't be complacent,strive to store value by getting asset with growth potential because Nigeria as we speak now has a very weak currency compared to other strong currencies like USD,EURO etc. However your choice in this season will still be dependent on your financial capacity,time frame,risk and other vital factors. Just ensure you maintain a healthy balance when it comes to savings and investment.