When Does Savings Transform Into Investment

Saving money is important, no matter what your financial situation is. Savings functions as both your foundation and your cushion should you fall. You never know when you could possibly need some extra money in your weekly or monthly budget, such as an abnormally high utility bill or unforeseen car repair.

Savings are great to a certain extent, but if it gets to a point when you have a pile of money gathering dust in the corner of your savings account, it’s time to start considering investing your funds. You can transform that extra money sitting in savings into a profitable investment that could provide significant growth and returns for you in the future.

What’s The Difference Between Savings and Investment?

Saving is low-risk to risk-free. It’s when you take some money and set it aside in a commercial bank’s account or low-risk security such as a CD for the long run. You can easily access the funds if you need it, but most often it sits in your account, gathering very little interest as the time passes.

An investment is when you take the money you had set aside in savings and put it towards some sort of asset which you view as either increasing in value or able to provide residual income (such as bond payments). You can invest in almost anything, from the stock market and real estate to fine art and restaurants. Continue reading When Does Savings Transform Into Investment