The difference between saving and investment

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Both saving and investment make your life wealth. Some people could not differentiate both of them. I think they should know the difference.

Saving is simple activity, according me. We just put the part of our money in piggy bank. Some people will put apart the salary or income for saving. If we have more money, we can save more money too. Unfortunately, saving does not give us addition money. If we put $ 1000, we will get $ 1000. If you saving in a bank, you just get less interest. Sometimes the interest is lower than inflation rate. In fact, saving in bank does not give you enough return.

Meanwhile, investment is a complicate activity. You cannot put one penny in any investment as if you save in your piggy bank. The cheapest investment is mutual fund which price is around $ 100. Mutual fund is good for beginner investor because the manager of fund constructs the best portfolio for you and give you higher return.

Therefore, you need to save money before investing. You may collect some penny at piggy bank and then buy mutual fund or shares.The return of those investments must be higher than saving in piggy bank.

The return of investment is often higher than saving. Some investor could double the money from it in one years that it is impossible to get from saving in any banks. On the other hand, the investment risk is also high. We might loss our money if our investment is decrease. The stock price moves uncertainty.

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