Over the past several years, we have faced the uncertain aftermath of the recession. As it fades into the past, we are left wondering what the future might
hold for ourselves and our families. We face a decision: should we save or invest in creating a better tomorrow.
We are going to explore what exactly each option entails along with their pros and cons to help you make the best decision.
Saving for Tomorrow
We start learning to save our money at a young age with little piggy banks full of allowance money. In fact, it is a necessary part of the financial responsibility. Savings are comfortable and reliable. They are a financial resource, as it was since we know that the money won’t be going anywhere and it’s there if we have a sudden need like a new roof or fixing the car. All it can do is accumulate interest if you have a long-established savings account.
However, the low and slow interest can also be a hindrance. Most banks have very low-interest rates compared to other banking options such as certificates of deposit, which means you're depositing the money for an extended time without immediate access.
Investing In Tomorrow
An Investment can be defined in a few ways. It could be buying a new house, a car, or maybe even buying a few shares in a company. If you make smart investments, the benefits certainly outweigh the advantages of simple savings. Prudent or Informed investments can potentially provide for future financial independence.
That said, it is ALWAYS a risk. If you are investing in a house, there is always a chance that the housing market might not be in your favorite years down the line. That Hummer you like might be cool, but how much will it cost you at the gas station? Maybe you invest in a company seeing great success, but a week later drops in stock. It’s a gamble.
What Should I Choose?
Both savings and investing have their benefits and limits. Saving is a necessity but doesn’t possess many advantages when it's just sitting in the back. Investing in the future is also crucial from buying a house to buying stock, but will always have a risk.
In a way, you can’t have one without the other. You need to save your money to invest in a big purchase ( house, a car) and you need to invest to save long term (a certificate of deposit or even a professional when making a large home improvement).
No matter which you choose to focus on for your future stability, one thing is sure. You must be SMART with where you put your money. That is where investing in a financial advisor comes in. With an advisor who knows every facet of the financial world, you will be able to make an informed decision that can save you the money and headache of unnecessary risks so you can have confidence in the future.Start planning for your future today.