what is the difference between saving for a goal and investing for a goal?

Question

Im learning about money management can anyone help me out with thses concepts....

Answer 1

Both is considered savings. The difference is saving implies short term. (i.e. saving for Christmas) Investing implies a longer period of time. (i.e. saving for retirement with a 401K)

Answer 2

They both require the same dedication, except that saving for a goal is usually a short to medium expectation where you save for something like a fridge, second hand car etc that may require up to two years of allocated saving to acquire.

And by allocated saving, I mean you budget a certain amount of your income say $100 a month to that goal. First you find out how much the item costs, and say a fridge is $889 you would divide that amount by the number of monthly or weekly budgeted allowances for that item.

You must budget your income to determine how much residual (left over) income there is, once you have deducted all living expenses, like rent or board, electricity, rates and other facilities, groceries, home/work travel expenses and entertainment expenses etc.

That would be the amount of money that you would be able to dedicate towards saving for an item.

With investing for a goal this is more of a medium to long term plan, you are saving money to make money, (or borrowing money from a bank - but don't do this until you've obtained proper financial advice first, and anyway I'd never recommend it, because it is best to start with your own money first, because some investments carry unpleasant risks - you don't want to get into debt with someone elses (like a bank's) money in particularly), you could save the same way as my example above in order to purchase a home or investment property, buy shares, debentures or first rated bank notes.

These you can get from prospectuses issued by Financial Institutions, so you really need to do some serious research before deciding where to invest your money.

Personally, I don't buy shares directly, I prefer to make contributions to my Superannuation as this is the best long term saving and investment goal there is, apart from home ownership or property investment.

With Superannuation you can decide which investment portfolios suit your needs and invest accordingly.

I hope this explanation assists your enquiry. Good Luck

Answer 3

Saving involves putting money away in a low risk or no risk money placement. It could be in a jar, or under your mattress, or in a Federally insured savings account. The insured savings account is the safest. However, because of the low interest rates banks pay and inflation, you'll probably, at the most, gain only about what you actually put in.

Investing involves putting you money in higher risk placements with the chance of much greater gains in a much shorter time. The placements could be property, stocks, businesses, rare coins, etc.

Don't let the term "higher risk" intimidate you though. When you put money in the bank, they pay you a return of 2 to 4 percent (if you're doing well) while they are actually placing your money in "high risk" investments and earning 10, 15, 20 percent or more on your money. This is one way banks make their money.

The key is to really understand investing, in order to take out the risk or minimize the risk. This is how the rich get richer. One of the best books written on money management is sited below.

Wish you success!

Answer 4

Time.

Saving is usually what a person does if they have a very short amount of time.

Investing is typically for longer term goals.

Examples:
Goal 1. I'm buying a boat next summer. I'll save some money in a bank account for that.
Goal 2. I'm wanting to retire in 20 years. I'll invest some money in a stock mutual fund to help me do that.

Answer 5

Well, surely if you are learning about money management, you know the difference between saving and investing. Saving is putting the money away usually in an interest-bearing account. Investing is risking your money in hopes of achieving capital gains.

Answer 6

What quantity will you have saved and invested in in case you die the next day? Your query pertains to procuring term insurance vs total existence. Many will advise paying for term particularly of total existence and making an investment the version. it is not undesirable suggestion in case you have the diligence to actual save the version and make investments it. extra regularly the version is in simple terms swallowed up in the expenditures of ordinary residing and by no ability invested. existence insurance has its place in protecting your loved ones from financial disaster by way of fact it creates a immediately sources that your decrease fee expenses and investment plan might take consistent with threat a protracted time to equivalent. a minimum of purchase term in case you have a kinfolk that relies upon on your earnings.

Answer 7

Saving = Income - expenses

If cumulative savings is insufficient to meet your financial goals then you put that savings to work. In other words you work for your income and generate savings.

Savings placed in an investment vehicle like a bank deposit earns interest for you. That is called investment. Investments work for you and generate more money without you working for it.

Answer 8

u can save to invest but not viseversa

saving came thr regular income
investment thr surplus/borrowed money