Saving and investing may appear similar but in reality they are two different activities with different objectives and results. However, they have one thing in common – the principle of compounding. Saving is aimed at safekeeping the principal amount of money. Conversely, investing is focused on acquiring return which could be bigger than the principal.
There are many ways by which you can invest your money. When it comes to saving your money, there is only one option. That is keeping it in the bank of your choice. Before getting into an investing spree, you must first know the investment vehicles available out there.
Bonds are securities founded on debt. This means you are lending money to a company or to the government when you are purchasing bonds. You will from it through the interest rate that you have agreed upon.
Buying stocks, on the other hand, allows you to be a part owner of a business or company and not just a lender. Dividend refers to the profit earned through buying stocks. Stocks can provide a high potential returns but their value can depreciate on a daily basis
If you want a combination of bonds and stocks, consider mutual funds. Buying mutual funds, allows you to pool your money with other investors and hire a professional manager who will intelligently select securities for you.
There are many ways by which you can invest your money. When it comes to saving your money, there is only one option. That is keeping it in the bank of your choice. Before getting into an investing spree, you must first know the investment vehicles available out there.
Bonds are securities founded on debt. This means you are lending money to a company or to the government when you are purchasing bonds. You will from it through the interest rate that you have agreed upon.
Buying stocks, on the other hand, allows you to be a part owner of a business or company and not just a lender. Dividend refers to the profit earned through buying stocks. Stocks can provide a high potential returns but their value can depreciate on a daily basis
If you want a combination of bonds and stocks, consider mutual funds. Buying mutual funds, allows you to pool your money with other investors and hire a professional manager who will intelligently select securities for you.