Is Saving or Investing Better at Growing Your Money

Photo by Mathieu Stern on Unsplash

Which is the better choice?

Saving is often seen as the more responsible way to build wealth. Unfortunately, that hasn’t been the case for some time. On closer inspection, saving is falling far behind the times given the current economic climate. 

Yes, saving is risk-free, but it has also become predominantly reward-free. Regardless of the amount or the duration, saving your money means it’s losing value, in the process, losing utility.

On the contrary, investments carry far more risk but also have far more dividends. The only caveat is that investing requires far more analysis and effort to comprehend and ensure you are investing in something profitable.

Another misconception is that investments are either stocks or real estate. Real estate usually requires plenty of capital to initiate, whereas stocks are volatile given their exposure to speculation.

A far more trustworthy investment would be a  Series I bond, which has an annual return of 7%. This low-risk investment surpasses inflation, ensuring your money maintains its purchasing power.

You can also look into other low-risk investments such as Certificate of Deposits, money market funds, corporate bonds, and money market accounts.

Bottom line: if you had an option to save or invest, the astute choice would be to invest in inflation-surpassing, low-risk investments.

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