When you put away available money for future we can simply term it as “Savings”. When you invest or deploy the money that you saved, to earn something, it is “investing”.
We all think of future and events which would require a certain amount of money to be made available. Thinking, rationally, we try to set aside some money out of current earnings or available resources. We can do it perpetually.
As a next logical step, you would keep that money in an interest bearing account where money could be available for contingencies but would bear interest. There are Banking Institutions which would pay you good return for keeping the money with them. ING, Bank of America, Citibank are some of the examples.
You might have heard of inflation. Inflation makes your money’s power to purchase lower. As such, when you are saving, you need to examine whether inflation will reduce the future value of your money even after adding up the interest that you might get. When you realize that interest may not be sufficient then as a next step you need to look for bonds which guarantee a return equal or higher than the rate of inflation.
At times we find even that as not sufficient an incentive to forgo today’s needs for the future. Investing is the option that you are likely to examine at this point. Typically, you would either educate yourself in investing or seek help. The basic principle is to buy low and sell high. That’s too simple. How would you know the future price of a scrip so that you pick the right scrip and right time. You have to be, ideally, correct in both. It is more of chance (or luck as some may put) that you are right in both. Through constantly studying the market, the business cycles in respective industry and leading companies you can reach a stage where you can start making good judgment. There are various research publications which have some products which can guide you. But remember, they can only guide you. It is you who will need to assume the risk.
Investment – Take Control
When you put away available money for future we can simply term it as “Savings”. When you invest or deploy the money that you saved, to earn something, it is “investing”.
We all think of future and events which would require a certain amount of money to be made available. Thinking, rationally, we try to set aside some money out of current earnings or available resources. We can do it perpetually.
As a next logical step, you would keep that money in an interest bearing account where money could be available for contingencies but would bear interest. There are Banking Institutions which would pay you good return for keeping the money with them. ING, Bank of America, Citibank are some of the examples.
You might have heard of inflation. Inflation makes your money’s power to purchase lower. As such, when you are saving, you need to examine whether inflation will reduce the future value of your money even after adding up the interest that you might get. When you realize that interest may not be sufficient then as a next step you need to look for bonds which guarantee a return equal or higher than the rate of inflation.
At times we find even that as not sufficient an incentive to forgo today’s needs for the future. Investing is the option that you are likely to examine at this point. Typically, you would either educate yourself in investing or seek help. The basic principle is to buy low and sell high. That’s too simple. How would you know the future price of a scrip so that you pick the right scrip and right time. You have to be, ideally, correct in both. It is more of chance (or luck as some may put) that you are right in both. Through constantly studying the market, the business cycles in respective industry and leading companies you can reach a stage where you can start making good judgment. There are various research publications which have some products which can guide you. But remember, they can only guide you. It is you who will need to assume the risk.