When to save and when to invest?

When to save and when to invest?

  • images (4).jpg

    6KB

    2021/08/27

Description


On one side stand hardened supporters of safe saving. On the other are those who argue that money should be raked in and invested. A storm may arise when the two fronts clash, but it is somewhere in the middle where amazon opinie and the whole truth lies.


Is it worth saving?


Saving money, or putting it aside, should always be done when we have the right goal in mind. When we want to buy a car in the near future, do some renovation, go on vacation, or provide ourselves with security in case of "emergency". Money saved for such purposes should be safe.


When we build our financial safety cushion, we should make sure that saving is not associated with the risk of capital loss. Why do we create an emergency fund or financial security fund? Of course, we do it to get our financial security policy. In this case, traditional deposits will be the best option. They are safe, although they don't actually make money. However, when we talk about life savings, we are guided by stability and lack of risk. In the case of deposits or savings accounts, the risk is practically non-existent (the capital stored in a bank is protected by BFG up to the amount of EUR 100,000).


Saving can be compared to such a safe haven, which, however, gives few opportunities to multiply money.


How to save money?


If you are just starting to plan your finances or future savings and investments, start by building an emergency fund. Set aside the first min. 1,000 PLN. This will be your lifeline in case of sudden and unexpected expenses.


In the next step, consider your consumer loans, if you have any. If you have debts (apart from a possible mortgage), at this stage the best investment for you is to pay them off as quickly as possible.


After that, start building your financial security cushion. This will provide you with a lifeboat that will allow you to weather life's storms and turmoil. When creating such a security policy, you need to be focused on a slightly longer savings horizon. The financial cushion should be at least 3 times your cost of living. It should be at least 3 times your living expenses (or your family's if you have one). Experts recommend that you build up a financial security fund equal to 3 to 12 months of your living expenses. The money accumulated in this way should be kept in a safe place and should not be invested (savings account, deposit or possibly money market and cash funds).


Once you have stabilized your current financial situation, start saving for retirement. The sooner you start doing this, the better your results will be at the end. With such a long time horizon, programs like IKE and IKZE work best. They allow you to save efficiently and also give you tax preferences. In addition, they are quite flexible, so you are not obliged to make regular monthly payments.


In saving the most important thing is regularity and capital protection. Investing, on the other hand, is about effectively multiplying your financial surplus.

When is it worth investing?


Investing involves a long-term horizon. That's why it's important not to use a safety cushion to invest your savings. Money that you will or may need in the near future is actually not suitable for investing. It is risky to undertake investing until you have a reasonably stable financial situation, which is when you have no savings. Those who have debt may be even worse off.


If you have built a strong foundation and have a safety fund, it is advisable to start investing the surplus. It's a shame to miss out on the chance to earn an adequate return by just keeping all your money in savings deposits. The purpose of investing is precisely to get a higher rate of return for surplus funds than is possible with savings.


When are we talking about financial surplus? When you have a stable financial situation. Your income is greater than your expenses. You have a minimum of a three-month financial cushion. And you are left with funds that you can use only for investing. You can invest even small amounts in mutual funds (even from 100 PLN), so it doesn't have to be a huge surplus.


Remember that money for investments is money you should "forget" about for a long time without compromising your quality of life. If you want to achieve good returns, for example by investing in mutual funds, you have to start thinking long-term. This is the only way investors are able to make above-average profits. You have to remember that the higher the profits you expect, the higher the risk you have to accept. Choosing the right investment strategy will help you properly manage your risk to reduce it.


To illustrate this with mutual funds - you commit capital to a fund. In this way, you put your surplus funds in the hands of experts. They will try to earn an appropriate profit for you. However, it is you who must determine at the very beginning what risk you are willing to bear and how much profit you are set on.



When to save and when to invest?


To sum up - it is best to do both. Saving is associated with a completely different purpose than investing. The former is to create a protective shield for a certain part of the capital. Investing, on the other hand, is meant to allow another part of your capital to work hard and earn money.


Comments
There are presently no comments.
Similar projects
EXPLORE MORE
EXPLORE MORE
EXPLORE MORE
EXPLORE MORE
EXPLORE MORE

The license and other terms for contributing and using assets in the Autodesk Gallery are found in theAutodesk Terms of Use.

Statistics

  • 41
  • 0
  • 0
Industries

Categories

Products

Autodesk Online Gallery

© 2014 Autodesk, Inc. All rights reserved.

All use of this Service is subject to the terms and conditions of the applicable Autodesk terms of service accepted upon access of this Service.

This Service may incorporate or use background Autodesk technology components. For information about these components, click here: http://www.autodesk.com/cloud-platform-components

Trademarks

Autodesk, the Autodesk logo, and Fusion 360 are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates.

All other brand names, product names or trademarks belong to their respective holders.

Third-Party Software Credits and Attributions

Ruby gems is Copyright (c) Chad Fowler, Rich Kilmer, Jim Weirich and others. Portions copyright (c) Engine Yard and Andre Arko

bootstrap-select.js is Copyright (C) 2013 bootstrap-select

Backbone.js is Copyright (c) 2010-2013 Jeremy Ashkenas, DocumentCloud

Apple-Style Flip Counter is Copyright (c) 2010 Chris Nanney

imagesLoaded is Copyright © 2013 David DeSandro

jQuery is Copyright 2013 jQuery Foundation and other contributors http://jquery.com/

jQuery timepicker addon is Copyright (c) 2013 Trent Richardson

jQuery ColorBox is Copyright (c) 2013 Jack Moore

jQuery.gritter is Copyright (c) 2013 Jordan Boesch

Masonry is Copyright (c) 2013 David DeSandro

Underscore is Copyright (c) 2009-2013 Jeremy Ashkenas, DocumentCloud and Investigative

Reporters & Editors

underscore_string is Copyright (c) 2011 Esa-Matti Suuronen esa-matti@suuronen.org

Icanhaz.js is ICanHaz.js is Copyright (c) 2010 Henrik Joreteg (Mustache and Mustache.js are Copyright (c) 2009 Chris Wanstrath (Ruby) and Copyright (c) 2010 Jan Lehnardt (JavaScript) respectively)

Calendario is Copyright (c) Codrops 2014 by tympanus

All the above software components are licensed under the MIT license.

Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the "Software"), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions:

The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.

THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.


Portions relating to lightbox are licensed under Creative Commons Attribution 2.5 License (http://creativecommons.org/licenses/by/2.5/). Lightbox was authored by Lokesh Dhakar (lokeshdhakar.com).