Do I have to choose saving over investment?
When it comes to finance, I believe there is always a lot more to learn, the internet is filled with opportunities for us to learn on a daily basis, and it is our duty to take every opportunity as it comes, there are some categories of individuals who believe it is better to save and for some others, it is just better to run straight into investment without saving. I must establish the fact that investment and saving are both good financial options, and they are good directions to look at whenever we are planning for a good financial path.
In this article, I would like to highlight some of the things we need to know about the both sides and, together, we will be able to figure out which one we should really take seriously.
What does it mean to save?
Let me start by describing what saving means, it is the act of keeping funds away somewhere separate in order to fulfil a specific purpose or need. Saving is a way to have a part of your earning kept in a place where you have no intention of touching, except, of course, it is to fulfil the purpose for which it is being kept.
What does it mean to invest.
Investment is the act of keeping a certain amount of money in a venture where the sole purpose is to have it increase or multiply. Investment, however, is not a one - way path because the funds kept therein can either increase or decrease in value depending on the success or failure of the investment.
Saving and investment are excellent options, the question so many people ask is, at what point should they choose saving overinvestment and at what point, as well, should investment be chosen over saving.
Emergency savings are extremely important, before you begin to invest, you should think of keeping certain funds aside simply for the purpose of emergency, anything could happen to anyone at any point in time and only emergency funds would be able to provide those solutions at the time.
Debt is the other thing that needs to be sorted out before investment is made, investments do not seem to make sense when there is a long list of debt on the line and this is because investments have the capacity to go south at any time and the interest rate on debts continue to increase on a regular basis.
If you have enough savings to cover up for a period when things may not be as rosy as they should be, then yes, pull the plug and make the investment risks that are needed.
You need to be sure that you are making the right type of investment before you venture into it at all.
Conclusion.
Saving and investing are two extremely important financial options to regularly consider, if we must invest, however, we must understand that it comes with certain risks, and we need to be ready both financially and emotionally in o