Even though the act of saving and investing are the same, the future outcome can be very different.
The typical concept of teaching money is – give, save and spend.
Which I feel leaves out one of the most powerful concepts of Money – Investing.
Honestly it’s hard to create wealth by just saving; money has to be invested for it to get a return.
- Investing can mean many things…
- You can invest in yourself through education
- You can invest in things you love that are collectables
- You can invest in things that are important to you
- You can invest in a business, the stock market or things like gold and silver
- You can invest in other people, your community and your family
Investing is about putting yourself, your money, your time, or your expertise into something that you feel will return something of value.
If you invest in a business and it makes money than your investment has made a return.
If you invest in your community and it becomes a better place to live, you have gotten a return on your investment by having a better place to live.
If you invest time in raising money smart, healthy, happy kids then your investment of time will be priceless.
What is something that is worth investing in???
What ever you think has value.
Now for Savings…
- You can save money in the bank
- Save money on a purchase
- Save something from happening
- Save yourself from financial ruin
- You can save time, save space, save on gas, save on electricity and save the planet
- You can save schools, businesses and the environment
You can save your kids from a life of bad money habits, health issues and unhappiness by taking the time to educate them in these areas.
Does it take a little time, yes, but the payoff is huge.
The old saying… Nothing in life is free has some truth to it… and some things that are free can be very costly.
Now financially speaking the difference between saving and investing is simple.
You want your saved and invested money to be working and earning.
Your money can work 24/7 unlike you.
You want your savings to be liquid so if you need access to it, you can access it.
You can save money in a savings account, CD’s, and Money Markets. These accounts are FDIC insured and earn a little interest.
But you know it’s always going to be there for you. Money in the bank has a calming effect on most people, even surveys show that kids with savings accounts have less stress and more hope for the future.
We should have at least 6 months to a year worth of expenses saved in one of these accounts for… the just in case, and less stress is even a better reason to have savings.
Now investing on the other hand has the same concept as saving, but the hope is that the invested money will earn a higher return.
Many people have a bad feeling about investing money, and rightfully so after what happened on Wall Street. But, that’s not the only place to invest your money, as I mentioned there are other things to invest your money in.
But the bottom line is you have to become educated in the process. You must also know that no one else will take better care of your money than you.
Don’t trust anyone with your money unless you have taken the time to read the fine print, know that they have your best interest at hand, and even then double check everything.
If something feels to good to be true it probably is. And listen to your gut, it’s usually right.
This is your future; design it how you want it to be!
Use financial planners to help you understand all you need to know. If you don’t understand what they are saying then ask better questions.
Don’t let anyone mess with your future. Build the strongest financial fort you can, and become educated in things that matter and can make a difference in your life.
If you don’t have a savings… run don’t walk and set one up!
My favorite of course is ING DIRECT.com I have this free account and so do my kids and all my friends.
And for investing, a great place is my other favorite Sharebuilder.com I have these accounts and so do my kids. So rather then going out to lunch save the $30 and have a P&J and invest in one of your favorite companies.
To find out more you can visit BankRate.com where they will compare different online banking products that have higher returns and you can compare interest rates.