Sunday, 12 November 2017 13:35

Saving vs. investing. Which one is for me?

If you are one of the lucky ones and have a little bit of spare cash knocking around at the end of each month, you will probably be debating about how best to make this money work for you. A lot of people would say you should pay into a savings account each month and watch the money grow over time, whilst others would tell you to invest the money in order to experience real gains.

So, what’s the best option? Well, it all depends on your circumstances really.

If you are wanting to make short term gains, investing may not be the best option; however, if you are prepared to do plenty of research and want to save more for the future, then maybe looking at ways to invest now may be the best thing for you.

If you are wanting to invest for retirement say, then starting now is key. Starting as soon as possible is crucial as many things can happen along the way that may impact on your investment. There may not be as many investment opportunities further down the line if you hold off for instance, rates may vary meaning investment isn’t as lucrative 10 or so more years down the line and there may be a change to your circumstances meaning you can’t put as much spare cash into investment. Whilst you have the cash now, it is wise to put it to good use in the here and now whilst you have the means to do so.

If investment is for you, you should start off by spending all of your time researching and finding out the best place(s) to place your money. If you have a passion for property, it may be wise to invest in property as it is always good to have investments where you understand the market/genre and can easily watch when things are on the up or taking a bit of a dip. It’s hard enough investing without investing in a subject that you know very little about.

Of course, wherever there is a decision to be made about money, it is always wise to not jump into anything without knowing 100 per cent what you’re doing. As with all things in life if would be wise not to put all your eggs in one basket and be very cautious about getting ahead of yourself. A good investment is not just one investment venture, it will probably be spread over a couple of opportunities. Make sure you invest in different fields too. This is so that should something unexpected happen, you still have other investment interests that will be likely to come to fruition and give you the gains you’ve worked hard for. Be diverse, but more importantly be brave. Something like this does require a little bit of risk and a little bit of luck, you can’t predict the future, for instance, and there may be some investment opportunities that look odds on to give you rewards at the moment, but for whatever reason this may not always be the case, so just keep track and keep abreast of imminent rule changes or forecasts.

Ultimately, if you do your homework and are serious about investing, more often than not it will pay off for you in the long term.

Saving is also a great way of building up a financial portfolio, but you have to be very determined. If you are serious about saving you will need to put so much away every month and not be tempted to dip into it whenever you feel like it. Saving is a very hard thing to do but pays dividends if you can pull it off. You should get to grips with the different savings accounts out there and see which can offer you the best in terms of rates and profitability in the long term.

Always bear in mind, however, before you look into saving, ensure that you have got enough money to put away without putting yourself in monthly jeopardy.

What we mean is if you are wanting to start saving, but struggle to get by on a monthly basis and can’t pay bills as it is, then now may not be the time to think about savings accounts and putting money away. Instead, your priority should be to get on an even keel and focus on tightening your belt so that you can live more comfortable. Once this has been achieved, then saving and investing in the future can begin.

In our opinion, both saving and investment bring a lot of rewards; personal circumstances will determine which one is the best for you however.

Always remember though, do your homework.