what’s the key difference between saving and investing my money?

Wondering whether you should save or invest?

What’s the key difference between saving and investing my money?

🎀Saving🎀

This is putting money aside, bit by bit. You usually save up to pay for something specific, such as a holiday, a deposit on a home, or to cover any emergencies that might crop up (like a car breakdown).

Saving usually means putting your money into cash products, such as a savings account in a bank, building society, or credit union.

🎀Investing🎀

This is taking some of your money and trying to make it grow by buying products that might increase in value over time. For example, you might invest in stocks, property, or shares in a fund.

While the gains from investing can be bigger and far outweigh saving it, the value of investments can also go down as well as up.

💰So Lets See Some Calculations💸💰

If you deposited 2,000 in a savings account at a 3% annual interest rate, it would grow to 3,612 in a 20 year period (before taxes).

The same 2,000 invested in a stock mutual fund earning a standard average of 10% a year would grow to 13,455 in a 20 year period (before taxes). (source: smartaboutmoney.org)