When you hear people talking about investing, a million things may run through your head. Does it mean saving money? Does it mean spending money?. To me, investing means putting your money to work. In other words, it is a different way of making money.
As I grow up, I have always been taught that the only way you can earn or make money is simply by working. That is not always the case. You can invest in different ways such as stocks, bonds, mutual funds, real estate or making their own business. People make investments to make money without having to work for the money. They also invest because they want to increase their personal freedom, sense of security, and the ability to afford things they want in life. That being said, investing is not gambling. Gambling is putting money at risk by betting on a certain outcome with the hope that you might win money.
Saving there is no risk because it is your money. More so used for short terms. Savings still allows you to access your money. As for investing you are more likely to lose your money than it is to save. When you invest, you also have the opportunity to earn more money than when you save. An example of saving, is if you were to put your money if your bank to save for a car than nobody else but you, can touch or take that money. An example of investing, is giving someone money for a bond, then they would only have so long to pay you back. By investing your money, you’re putting a risk to lose your money.
It is important to save and invest money when you are young because than you can save money for needs you want later in life. For example, postsecondary, a car, a house, etc. While you’re young you should learn about money and how to use it properly for when you are older you know how to invest and save for the real world. Also, if you save while you’re young, when you’re older you will be able to have extra money for needs you need to have in life.