Saving and investing money: the two sides of the coin

 This is a subject that is common to all: how to manage our money.

 Over time, the relationship with money underwent several changes and, depending on the historical period, the way money was managed took on different models.

 The dynamics of the relationship with financial resources depend not only on the culture of the society in which we operate, but also on the individual profile: some are more conservative, others risk more.

 In fact, financial education is essential for a healthy relationship with money, defining the way we manage our consumption.

 John Labunski believes that knowing how to manage money well is one of the factors that improve our well being. In this sense, we have gathered, in this text, information on the main differences between saving and investing. Find the one that best suits your lifestyle.

 Saving or investing: how to handle money

 Saving and investing are two different ways of relating to money. And they can be dependent on each other. The money you put aside, that is, you save, can be used, at a given time, to invest.

 Briefly, we can characterize these two ways of dealing with money as follows:

 Save

 The decision to save means that you set aside a portion of your monthly budget for a cash reserve. This decision also implies spending less. Generally, those who save have the objective of acquiring a good or preventing unforeseen situations.

 The associated risks and returns are low.

 Saving and investing money: the two sides of the coin

 Investing implies a reserve of money. And there are investments for the various types of financial investment profile: conservative, moderate and aggressive. These categories correspond to the degree of risk that the investor is willing to take in this type of operation: the greater the risk, the greater the return. And also, the loss.

 This formula is a law of the financial market: more profit, more risk.

 As far as categories are concerned, there are two general ones:

 ·         fixed income;

 ·         Variable income

 Between two possibilities - How to decide?

 This is a very common question. What is the best way to make my money pay? The answer will depend on several factors such as the financial market situation and investor profile. 

 Savings interest is very low when compared to some fixed income financial products such as Treasury Direct or CDB (Bank Deposit Certificate) linked to the Government and Financial Institutions. The risk added to this type of investment is quite calculated.

 Regulate the risk

 However, some people still feel more comfortable setting aside a portion of their budget for future events.

 For those who, on the contrary, want to increase their income in the short and medium term, variable fund investments may be the best option. 

 Depending on the risk the investor is willing to take, there are a variety of financial products such as hedge funds, markets and equity funds.

 

Invest or save: discover the one that best suits your investor profile.