SAVINGS & INVESTMENTS
Usually, saving means putting money together regularly for short-term needs, such as holidays or a new car, or for a rainy day. If you are saving for the short term you will want to get access to your money at short notice, earn some interest and keep your money safe.
Investing on the other hand, usually means saving for the longer term or the future, so that you can grow your money and be able to afford something in a longer period of time, for example your retirement, or your children’s education. Most investments involve some element of risk, but over the long term they also tend to give you better growth than cash, savings or deposit accounts.
HOW MUCH DO YOU NEED TO SAVE OR INVEST?
Generally, people have a mix of short, medium and long-term plans when it comes to saving. It makes good financial sense to spread out your cash and place some money in savings accounts where you can access it immediately to meet short-term needs, and some in longer-term investments, where it can potentially earn more for you and help you to meet your financial needs.
HOW MUCH SHOULD I SAVE/INVEST?
This will depend on your future plans and financial needs. If you are saving for retirement, you will need to save far more that if you were saving for a holiday or a car, which may only take a couple of years.
Look at your earnings, what you spend each month and what you owe on any loans. You can then decide what is best thing to do with your surplus cash.
FACTORS TO CONSIDER WHEN SAVING/INVESTING:
When will I need access to the money?
Can I afford this?
What are the risks involved?
Are there penalties for exiting early?
How much notice do I need to give before I can get access to my money?
Why is this product right for me?