Invest or save? Which is the best for me and my situation? What’s the difference between saving and investing? Does it matter if I am starting early or late? If you find yourself asking whether you should invest or save your money, chances are you should be doing both.  It really depends on personal goals, your financial situation, and if you’re looking at short term or long term goals. The first question is the easiest: What is the difference between saving and investing?

Saving is putting money aside bit by bit, typically for a particular goal. It could be a trip you’re saving up for, home improvements, Christmas or emergencies. Investing is taking some of your money with the aim of making it grow, by buying things such as stocks, property or shares in a fund. Depending on how quickly or slowly you want your money to grow also will help decide how “risky” of an investment you want to take. Higher risks typically lead quicker returns.

Everyone should be looking to save something. It’s never a good idea to live paycheque  to paycheque after all, or not investing into your retirement. The only time you shouldn’t save or invest is if there are other pressing matters that need to be attended to, like getting debts under control or ensuring your family’s security should you die. A good goal for saving is to put away 10% of your earnings each month. If you feel that might be too aggressive for your particular situation, start with 5% or even 2%. A little saving is better than nothing after all! For investing, you need to ask yourself what your goals are for your investments. These can fall into one of three categories (and yes you can have more than one):

• Short-term goals are things you plan to do within the next five years
• Medium-term goals are things you plan to do within the next 5-10 years
• Longer-term goals are things where you won’ t need the money for 10 years or more

If you’re 30 or older, you should have at least one long term investment for retirement. The best thing to do is speak to a trusted advisor about your options and what is best for your situation. Belmont Health & Wealth has trained advisors on staff who would be happy to sit down and talk to you about your personal goals. Call Belmont Health & Wealth today for a consult!

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