Investment vs savings

Investment and savings have many similarities, but they have key differences. Investing is the act of committing money to earn money on an asset, such as by purchasing stocks. Savings are used to keep your money safe and grow it over time.

Please note that while investments are a good way to make a profit and grow your wealth, they don’t guarantee a return. If you invest in the stock market and the market crashes, you could lose all of your savings quite quickly – so it’s important to be aware of the risks you’re taking with your cash.

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Investment is the process of employing capital in a productive enterprise through which ownership and the right to profit from its use is attained. Savings are accumulated income not yet spent or used to purchase goods or services.

In economics, investment and savings represent two methods of allocating scarce resources. Investment has a short-term focus, while savings have a long-term focus.

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Both investments and savings are generally considered desirable as they both help improve economic growth and provide income opportunities for individuals living off their investment/savings.