This is an issue that comes to my mind each time I have a few extra cash at hand. I have invested so much money that never yielded any profit, neither did I get my capital back. Since then, I’ve been thinking along the line of saving whatever comes into my hands. saving your money in an economy that is as bad as what we are experiencing here in my country, would not be a very good idea. Our local currency keeps depreciating every day. Saving your money in such an economy makes you loose the actual value of the money.
I have been thinking about what to do with my current earnings, so I went online to search for a solution to this issue. Here are some of the findings I made, and I hope it helps other people who might be facing similar challenges. This guide will give brief answers to the following questions.
What is saving?
Why we should save.
How much should I save?
What is investing?
How do I invest wisely?
What is saving?
“Saving is income not spent or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash.[1] Saving also involves reducing expenditures, such as recurring costs. In terms of personal finance, saving generally specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is a lot higher; in economics more broadly, it refers to any income not used for immediate consumption.”
https://en.wikipedia.org/wiki/Saving.
Saving means putting money aside, bit by bit.
Why we should save
If you do want financial freedom, then it is very important to save your money often. Here are some reasons why it is important to save.
Emergencies such as:
Sudden medical expenses. Sudden loss of a job or other means of income. Sudden opportunities might be available only to the person who has available cash. Etc.
Retirement
A time will come when you can no longer work for money. At that time, you will have to rely on your savings and investments to take care of your expenses.
For Investments
you’ll have to save up money before you can make huge investments. Except you inherited a huge amount of money or wealth.
How much should I save?
This is a very tough one, especially for those whose income can hardly take care of their basic needs. Yet, if we are determined to save a little part of our money, we can do that. Imagine it this way, if that income was less than that, you’ll still find a way to manage it. So you could assume you are earning 20% less than the actual income, then save that 20%. Living within your means will help you save. When saving turns to a habit, it becomes easier to save.
Some tips to help you save money:
- Use a budget planner to get a clear picture of how you spend your money
- Save unexpected money.
- Cut down on some expenses.
- Compare prices of things you want before purchasing them. You might still get nice quality brands with cheaper prices. Shop around before making your purchases.
- Break the habit of spending unnecessarily.
- Save at least 20% of your income should go into savings.
What is investing?
To invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future.
https://en.wikipedia.org/wiki/Investment
Investing means to put forth an amount of something with the expectation that it will generate a return in the future. You will hear people talk about investing their time or effort, and of course, money. When you invest your money, it means that instead of spending it you are putting it in some sort of vehicle that will use it to make more money. And that’s why investing is important: investments often involve lots of risk. So it is important to invest wisely.
http://www.moneyaftergraduation.com/2013/11/20/why-is-investing-important/
It is important to note that, we have both long term and short term investments. And the both of them have their good sides.
How do I invest wisely?
Never invest in things you do not understand.
Don’t invest in Ponzi schemes. Except you want to gamble with your money.
Get counsels from professionals before investing.
Whenever you want to invest, keep your emotions out of it.
Always think long term when investing
Don’t invest with all your money.
One of the greatest benefits of investing is that your money starts working for you and not the other way round.
Conclusion
Both saving and investing are very important for our financial freedom. Making a wise decision on both of them will help you live a more financially free life.
With the rise of the cryptocurrencies, investing in some of those coins would be a wise decision. Personally, I’ll go for Steem, Ethereum, and Bitshares.
I’ll end with this popular quote.
"Money isn't everything, but happiness alone can't keep out the rain."
All images were collected from imgur.com
Thanks for Reading
@elyaque made this beautiful badge for me.
Can't say one is better but I think saving is definitely more important. Saving first gives you a foundation to stand on if your investments go awry. After I reached some personal saving goals w/ cash & precious metals I was a lot more comfortable investing.
Also those are some great saving & investing principles listed. Those points alone will take anyone who applies them a mighty long way!
Great post!
Resteemed!!
@opinizeunltd, I think I have learnt something from your comment here.
Thanks so much for this comment and Resteem.
Invest in something that is almost inpossible to go down in value. I stack silfer because it is a lot harder for me to turn it into cash than to go to the bank and transfer or withdraw savings out and spend it. This has caused me to save a tom of money because firstly I bought it fairly low, below spot price now even, and it will never not be an ounce of silver. Precious Metals are one of the most solid investments that are also savingsnif you use them the way I do. Sometimes a guaranteed investment of increasing with inflation is the best bet. Plus silver specifically is highly manipulated by the banks like JP Morgan etc. If it goes up and any of the market manipulations end or are exposed than the price will go through the roof and that ounce of silver will go from $18 to $30 maybe $50 and some people say even higher. I think ling term that Precious Metals, especially Silver is the best investment. Short term I would play the crypto market. Buy when there are price corrections and sell when it goes back up. Buy at the bottom and sell when t goes up right before it begins to slow down. That is my $0.02. 😉 Hope I gave you some but of info you didn't consider before. But it is hard to risk losing money. I have bought stocks that doubled and others that went bust. But Silver has always remained Silver. It never isn't Silver💰
@wwamd, thanks so much for this info. Investing in precious metals is a very good decision to make. I'll look into it.
I prefer saving. Investments come with risks. NEVER invest any amount that you are not willing to lose and thats a FACT. Great post by the way :)
Thank @pashelleclarke.Taking risk is a part of life. Both of them are important. Thanks for your comment here.
For me investing is better due to the ability to get more ROI. Saving is not and never will be the rich man´s wealth creation strategy.: invest, make profit and re-invest especially in passive generating income. Save in banks and gain practically nothing however diversifying your investments especially in top cryptocurrencies will certainly create wealth for you.
@charles1, I'll go with you, but investing involves a lot of risk. Sometimes, it doesn't turn out to be as we expected.
Thanks for your comment here.
I agree hence the concept of diversification. Do not ever lay all your eggs in one bascket. Investing all in Bitcoin or Etherium is risky ...hence diversify your profits to steem, Dash , Monero, silver and other passive income opportunities (conservative ones). I wrote some articles (see my page) on scams in cryptocurrencies including limitations of bitcoin and steem. Thanks for your comment.
Oh! Thanks for this. I'll go through your blog later.
welcome, and lets stay in touch
No problem.
Great. More success to you and keep up the interesting posts
Both saving and investment are important depends on where you save or invest your money,but I prefer investment more than saving.
@patasieduagh, I think a balance of the both of them is better.
Thanks for your comment here.
I think it's important to do both. Save it all, never see it grow. Invest it all, have nothing in case of emergency. For me, doing both is important.
@itsmekristylee, I am with on this 100%.
Thanks for your comment here.
Words of wisdom, thank you!
Followed you :)
You are welcome. Thanks for following me.
I will always say investing is a better.. Saving your just sits there... Investing it has potential to grow... Do you want to collect seeds and never plant them or plant them, see what grows???
@seymourbucks, I believe balancing both will be a better decision.
Too me, they are both the same, use for the future or for emergency.
Cheers,
@Yehey
https://QUE.com - I will follow ALL who follow me. I think that's fair.
@yehey, thanks your comment.
Great post. It is all about financial education. Saving is not a great idea, because central banks printing money, which means you lose value. Investing on the other hand is risky, so you better know where and why you invest.
@bloomberg215, you are absolutely right. Thanks for your comment.
I have i sort of balance between investing and saving.
That's a wise thing to do @lqss64.
Investing in something that protects your savings has the both of both decisions.
@mrdiamond217, thanks for this contribution.
If you are having trouble investing and making profit, you should consider investing in index funds. Index funds will go up and down the same way the market does, but they will always go up eventually like the market does. At least in index funds of countries that are not dieing. They are really easy to invest in, you just put your money there and wait. You can even save money into index funds by starting to invest a certain amount each month.
@wealthy-easily, thanks for this info. Please are you on steemit.chat so we can talk more on this?
I am
OK. Thanks. I will chat there later.
I think a middle ground is good, not that i follow that at all, but by thinking long-term and an investing accordingly that could pay out in 10-20 years that is safe and a good way to make money for later. But it's always good to have a "buffer" which holds about 3x of monthly income if something shows up all of a sudden.
@naskono I agree with you. thanks for your comment.
great post
@fproductions, thank you.
I think one of the best Investments you can make for now, and the future is property, this is not only an 'Investment' but is also a tangible asset that you can use if need be. With an increasing world population, land values will always be a bull market (Even if 2008 happens again), and in the long run, you never lose with property win-vestment.
My plan is to make small investments that give me a decent ROI, that I can save and use those saving to buy property.
That's a pretty excellent way of doing it! Always much better to start small and then scale later.
@locikll, I share the same view with you. Actually, investing in property will cost you a lot of money here. I'm saving money to do that.
thanks for your comment here.
Yeah the property market is pretty expensive in general, what you want to do is (I think I've said somewhere else so I might make a post about it later :P), if you want a property for ROI (Return on Investment), you want to develop an ROI Ratio, this is a ratio that is: Ratio = Rent / (Mortgage payments + Rates + Building + body corp Fees [apartments] + depreciation + interest), where the '/' is divide, upon comparing 2 properties to purchase, the one with the higher ROI Ratio should be the one to purchase. There are also other things to consider but I'll probably write a post about Smart Algorithmic property Investing in the future
@locikll, Thanks for this feedback. I have followed you. Looking forward to the proposed article.
Thank you very much! I will probably make a start on it soon
You are welcome.
Just finished writing it :)
When it comes to money, I think that one should consider the past, present and future. Money should be spent on past debts, and regular expenses such as rent, hydro, food, etc. Investments can be made for the near future (1 - 3 years) and for the long term (3 - 5 years and 5+ years).
With this in mind, I think there should be a balance between spending and investing in the past, present and future. This balance varies with the person and it can change over time.
@dkmathstats, thanks for this nice contribution.
Thanks for the info
You are welcome
Both are important imo. although my investmestments haven't worked out that great so far
@drewley, the same thing has happened to me in the past. But I believe I'm making wiser investments now.
Thank you for your comment here.
This is beautifully noted, thanks alot
You are welcome.
Nice article, I think a mix is the best and everyone has to decide how much savings and how much investing.
@researchcrypto, that's true.
Thank you for your comment here.
I will do the saving 1st and then investing.....hehehe....
That's good.
:)
I think both saving and investing should be done by everyone. Saving money gives me money instantly for emergencies or other miscellaneous items. Investing gives me a much higher ROI (for the most part).
This is a very good contribution. Thank you.
Thank you for your post, we had the same discussion a couple of days ago with a good friend of mine and I needed further arguments to explain to him why investing is excalerating your wealth even better than saving money. Will print that out and hand it to him :D (y)
You are welcome.
I prefer investing more than saving. If you save, you are always going to have the same amount of money. With platforms like Localbitcoins it is easy to pull money out of the Crypto world and get fiat to pay for bills, living etc, which is what I am doing at the moment. I also live in a country where the national currency gets weaker and weaker each day so it makes more sense to put that money into bitcoin than having it in my account.
Having said that, only invest what you are willing to lose.
" invest what you are willing to lose."
This is good advice. Thanks for your comment here @jaynectar.
This blog got me thinking whether i should save or invest my money... I guess, I have a lot of decision making and planning to do tomorrow morning 😋
@hellolylo, both are important.
Thank you for your comment here.
Great post @ogoowinner! I help people save money by investing in reliable companies. I would be glad to share with you ones that I recommend, which I personally use to make money.
@earnonlinewith, please send me a pm on steemit.chat
Depending on your circumstances, you should have 3-9 monthly net incomes in cash.
Thank you.
Investing 20% of your savings in something is always a good idea in my opinion. It provides a bigger chance of return plus the safety net of having your other savings in something more traditional.
Thanks for this awesome comment.
A beginner without sponsorship need to save first! I totally aligned with your post's ideas, no one can invest without a capital, capital could be a loan (debt) to pay, capital could be supports from loved ones. But for those without such avenues for capital; the only way out would be savings , You save first and then invest wisely. Thanks @ogoowinner, one thing i like about you is your exemplary life, thank for the STEEMS you transferred to my wallet, I've invested it already to my steempower. LOVE from @maxdevalue.
Thanks so much for this comment.
What do you think about having 3 funds:
1- Emergency fund: Have 6 months of personal expenses saved (for emergencies only)
2- Dream fund: Have 1-3% of your income to have fun (buy what you want, vacations etc)
3- Investing fund: Invest a large and consistent % of your monthly income. (start with at least 10% to get cash flow, and reinvest your profits)
Note: If you have debts (know the difference between good and bad debt) forget about fund #2 until you pay off your bad debts
@lulita, I think this is a great idea. Thanks for sharing it here.
Some governments introduced already negative interest rate on bank savings. So "saving" as a wealth long term strategy is the worst thing to do.
Absolutely in the case in my country. Thanks for this nice contribution @lulita.
My pleasure. Feel free to connect with me @lulita and leave some feedback on my posts...I'm always learning from others 😀
Both investing and saving are good in different situations. I would allocate more in investing than in saving as to hope for more returns.
Thanks for this comment.