The concepts and differences between investment and financial savings tend to confuse users in the banking sector. It is important to meet them!
You should start by being clear that before this, there is an important ingredient that is income. Without them, there can be no savings or investment. And “it comes to my memory”, the image of the process that should project the trajectory of saving and investment .
As in a cartoon … I have been given a saving little pig that every time when introducing coins and bills feels heavier. At this time I only save. But the time comes and I wonder, will it be worth it to hammer? That’s when the strategy begins. Which strategy ? then that of investment.
The two options entail a sacrifice in the present that brings benefits in the future. The conclusion of the story is one, saving is the prelude to investment!
Know the concepts of financial savings
- It is clear that saving is to set aside an amount of income, after compliance with expenses.
- Income – Expenses = Savings
- It is money that is not currently being used, but an objective must be found. For example, home purchase, retirement and investment.
- A savings covers emergencies or short-term needs
- Financially, you can open a savings account, it has no greater risk.
- The interest received is not significant, but it is safe.
Know the concepts and differences of the investment
- The financial investment is to deliver a sum of money to a bank in order to receive a profit in the future.
- Savings + Profit = Investment
- The investment requires programming a longer term with respect to saving.
- With the investment you can run an unexpected risk, because it is affected by the local and national economy. The investment can get lost.
- A deeper financial analysis is needed to know how to choose the products and services offered by banks.
As we have already seen, saving and investment are very different, therefore, they are not synonyms. But both are complementary and interfere in a country’s economy.