In today’s world, we have started to interchange the words “saving” and “investing,” but when we start to analyze these two things, we should be engaging ourselves in both of these things to secure our future financially. Although we use the terms saving and investing quite commonly, some people still do not understand the full concept of these two things. Before we go into this a little deeper, let me tell you about what these two ideas mean.
We start with saving. What does saving mean? Saving is an act of setting aside a set amount of money for future use. This money may be used in cases of emergency, for bill payments, utilities, groceries, and other things. Most of the time, this money does not grow rapidly. Saving is here so that we can set aside a certain amount for a certain event or situation.
On the other hand, investing is when we allocate money to expect some benefit in the future. This benefit is what the people in finance call a return of investment. This is the added money that you receive from the initial money that you have allocated. You use this money to fund a business, a car, a house, or even education. You set aside money for you to get something in return for that.
Now that we understand what these two ideas are let us compare saving and investing. The biggest difference between these two concepts is the risk factor. Saving money has a lot less risk than investing money. For investment, there will always be a possibility that you lose more than you are profiting, or you might get scammed. Many external factors may add to the risk that investing entails while saving is generally safer because you are only setting aside your money for future use.
Another difference is interest – it is the money you make from the investment. Of course, when we invest our money, we expect that there will be an interest in the money that we initially put in. An investment should always have an interest or money made. Meanwhile, the purpose of saving money is to keep your money safe until the time arises when you finally need that money.
To add, saving is usually very simple because it is a straightforward task that is easy to understand. On the other hand, investment has a risk factor that might create hesitation on the part of the investor. However, what investment provides is a higher return, but savings provides a sense of security.
So, when we think about it, both of these concepts can become very stressful and anxiety-inducing. When we think too much about how we are going to save up money for a future expense, for emergencies, for food, for bills, we overwhelm ourselves with problems that we eventually fall victim to stress and anxiety. The same thing goes with investments. What tends to happen is since there is no guarantee that the investment will create a high return and interest, there will always be anxiety on your part because it is money that you have worked hard for, and yet you do not have the assurance of its safety.
Continuing this thought, the stress and anxiety we feel with savings and investments may lead to even bigger mental health issues that can cause a serious decline in physical health. As they say, a healthy mind is a healthy body. So if we do not start to take care of our mind and we learn how to cope with stress and anxiety in a manner that is healthy and safe, then we will continue to destroy our mental health. We continue to allow ourselves to fall victim to even more serious health concerns.
With what is happening in our world today, we must learn how to save, invest, and take care of ourselves. We have come to a point in humanity where saving and investing are no longer enough. We should also start making sure that our bodies are healthy because if we think about it, our body and mind is our biggest investment. Without either of these two, we are weak, and we are no longer able to continue with life as we know it.
So, when you start deciding whether you want to invest or save, you also have to start thinking about what is most beneficial to you and your mental health. We cannot allow our minds to slowly lose themselves without us having to put a stop to it and start helping ourselves in the process.