Why You Need To Invest Your Money Instead Of Saving

 

Many of us grew up being told that it is always good to save – but with the changing time – saving is no longer a strategy you need to depend on. 

You’re probably confused when I tell you investing is better than saving – so to bring my point home, here are 5 reasons as to why you should invest your money and not save it; 

1.    Savings loses value to inflation, investing does not 

Savings usually don’t have good returns as such (in terms of interests). Chances are usually high that the saved money will lose value to inflation as time goes by and on most occasion, you will always need to add some more cash to your savings, if you decide to use it in purchasing something – basically because you will have lost value – ending up with less buying power.

 Also Read: Types of Investors: Which One Are You?

Investment, on the other hand, most of the times outstrips inflation which in turns prevents your assets from declining in value. 

2.    Investments bring in income, for saving you have to wait for an interest 

If you, for example, invest in buying shares at First and First Communications Limited (Fnfcom) – starting from Ksh.7,000 per share and a maximum of Ksh. 35,000 for five shares, we pay Ksh.14,500 per share after 90 days (Three Months). This plan is designed for investors who are new to the online investment world.

The investments you make can also grow and enable you to make more cash (income). 

3.    Magic compounding

 With magic compounding, you can benefit from the growth in value of your investment – if you invest for let’s say 10-20 years, you can end up with double or more compared to what you had invested, while for savings, only the interest, which is usually low is what you get. 

4.    Investment allow for diversity 

By investing your money, it gives you room for diversity where you can put your money on different areas – and if one investment does not do well, the other one will do better and cover up the one that has done badly. 

It also gives you room to sell good performing investments that might be richly prized and but cheaply prized ones. 

5.    Savings won’t give you enough for retirement

Unless you’re earning a high salary – don’t think of saving as an option for your retirement money – instead look for a place to invest, even if it is that little money that you have.

 Also Read: List Of 10 Life Rules That Will Help You Become Successful

The bottom line here is that as much as savings is good and will buy you time – when things go wrong, you can’t usually depend on it for your future financial stability. 

If you have some cash, it is wiser to invest rather than saving. 

Sign up as an investor at Fnf and see your investments grow.

Joshua Cheloti

 

Joshua Cheloti is a digital journalist and an experienced content creator with demonstrated writing skills on a variety of topics ranging from digital investments, business and technology.