Few day ago I shared a poll here asking which is more important: SAVINGS OR INVESTMENT? A lot of you voted investment as more important than savings, hence I saw the need to do a follow-up article.
I will shed more light on these important financial freedom instruments so we can understand the two.
Savings and investment are both important and can help you achieve financial freedom but first you need to know the difference so as to know HOW and WHEN to deploy them.
YOU need to know when to save and when to invest.
Saving is the act of putting away money for a future expense or need.
How to Save
When you choose to save money, you set aside a percentage of your income for future use or purpose. This requires alot of discipline and techniques. Savings can be a short-term or long-term goal. Informed saving techniques requires depositing or putting your money in a low-risk account or instrument.
When to Save
A wise person must know when to save. Savings if for all regardless of your economic status. People save for all kinds of reasons. Some save to start a business, while others save to improve their standard of living. Some others may save to buy or invest in assets. So here you see that savings a vehicle that drives us to our investment destination.
A Dangote may choose to save a percentage of his personal income to carry out a pet project, not because he’s poor or looking to improve his personal economy.
Savings shouldn’t be seen only as a need for the poor. People save most time to avoid pressure and be able to carry out project or expenses without negatively impacting their current income.
It is however wise to save where you will not lose monetary value at the end of the day. For instance, if you keep your savings at the bank where you’re paid 1.2% interest per annum in an economy where the inflation rate is almost 14%, what that means is that at the end of a year when you withdraw your money, you have lost over 12% of the value. What your money can buy when you start saving, it can no longer buy it by the time you withdraw your money because the price of materials has gone up.
If you are looking to maximize your savings, you need to talk to professionals or financial experts who are sincere. You can come to us at Villamond Investment because we offer an above-inflation rate ROI on your savings.
Investment, on the other hand, is similar to savings, in that you’re putting away money for the future, and the return on investment is much higher in exchange for taking a higher risk.
In financial principle, the more risk you take, the higher your return.
If you’re looking to invest money, you should plan to keep your funds in the investment for a longer period.
Typical investments include stocks, bonds, mutual funds, capital market and exchange-traded funds etc.
Never forget, savings is not more important than investment, neither is it the other way round. They’re both weapons of fighting poverty, lack and financial pressure, hence your financial goal determines which one you should deploy.
Talk to us today
Come to our office or
Chat with us on Whatsapp wa.me/23480
You may also send us a mail at info@villamondinvestment.com