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To save or to invest



You begin your wealth management by setting financial goals.

Well, that’s the easy part.

Once you’ve got your goals listed down, you need to make sure that you choose between the saving and the investing strategy. We’ve shortlisted two of the major factors that help you decide which one to go for.

TIME

If you are in for a smaller and shorter term goals, that are nearer to three or four years down the line, then Savings is perhaps the best way to go for you, as you will have easy access to the cash. This can include saving a holiday, wedding or car.

It's also useful to have savings which you can get at quickly in the event of an emergency or if you need access to your money at a set time.

Savings act as a rainy day plan, and can work as a rescue mission to your wealth during times of crises.

However, if you are planning to  reach bigger long-term goals  that are at least four to five years away, and are willing to be patient to let the money stay in the market ( it’s not as easy to get your hands on it quickly as compared to a savings account) then you can surely go the investment route.

RISK

Your attitude towards risk will play a major role in making this decision. If your money is in a savings account, it’s at minimal or no risk.  An investment however, always involves risk. You may lose some or all of the money you invest. However, you will have a higher potential for profits, which comes as an added reward for your risk.

With the threat of inflation, and other risks involved, if you are looking into the big picture, considering an investment is a good option for you.

Other factors such as your salary and expenses, your attitude and your goals, your age and the other savings that you have in hand. 

Also remember, you need to save to invest. Not save to just save.

Written by: BALAKARTHIGA.M  



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