Savings: Money can be defined as something that is available when you need it, making it easily accessible. However, the downside is that it may lose value due to inflation.
Investment: Can be defined as contributing your money (or savings) to a financial instrument such that it has the potential to increase in value over time, even allowing inflation. .
While savings can help you achieve financial independence, they may not help you work towards building wealth in the long run. For example, you may have the money to buy the car of your dreams, but when you
planning ahead for your retirement
Prudent investing will help you potentially build a sizable corpus for the given amount of time and the right investment tools.
A good way to decide whether you should save or invest can be to identify your objective or goals, whether they are short-term or long-term. While it can be helpful to save a decent amount to meet your short-term goals, emergencies and contingencies; In the long run your needs may change and inflation will also be accounted for where saving money may not help in achieving your long term financial goals.
Investing can help bridge the gap between your future financial goals and your current situation. For potential wealth creation, it is advisable to start investing early. When you plan to invest for the future, always keep your financial goals and investment horizon in mind. It also helps to understand how much risk you are willing to take to earn proportionate returns.
Once you have saved some money, you can consider investing in a financial product like mutual funds. Investing in a disciplined and systematic approach through SIP or systematic investment plan will make your money hard for you and you can take advantage of rupee cost averaging and compounding if you stay for long term.
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Disclaimer
An investor education initiative.
meeting www.icicipruamc.com/note To know more about the process of fulfilling the Know Your Customer (KYC) requirement for investing in mutual funds. Investors should deal only with registered mutual funds, details of which can be verified on SEBI website http://www.sebi.gov.in/intermediaries.html, For any queries, grievances and grievance redressal, investors may contact the AMC and/or Investor Relations Officers. In addition, investors can also file complaints on https://scores.gov.in If they are dissatisfied with the proposals made by the AMC. The SCORES portal allows you to register your complaint with SEBI online and view its status later.
Mutual fund investments are subject to market risks, read all the documents related to the scheme carefully.