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Save or Invest: Which is Best?

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Save or Invest: Which is Best?

One question that many Canadians have when it comes to their financial planning is whether saving or investing is the way to go. There is no definitive answer for this, however; it really depends on your goals and your specific financial situation.

Saving is defined as putting money aside, bit by bit. Usually people save up for something specific, like an emergency fund, a new vehicle, or planning a family vacation. Saving usually involves putting money into a regular savings account. Some may even tuck money away in their home!

Investing is making your money work for you, by trying to make it grow by buying things you feel will increase in value. You can choose to invest in stocks, bonds, real estate, mutual funds, or even purchasing gold when the price is low, with the intention on selling it once the price is high.

When it comes to savings, everyone should set up an emergency fund, because everyone can have unexpected things come up that they need to take care of. And financially it’s much better to use savings rather than paying on a credit card, and then having to deal with additional interest. A good rule to follow is to save up three months’ worth of living expenses. This includes rent/mortgage, food, utilities, etc.

Once you have your emergency fund in place, try to get in the habit of continuing to save for things you may want to buy. An exception to this may be if there’s debt that needs to be paid off; it’s a good idea to take care of that before planning to buy more.

Investing can fall into short term goals (things you plan do to within the next 5 years), medium term goals (things you plan to do within the next 5-10 years) and longer term goals (ones where you won’t need money for 10 years or more). Investments can be a lot more complicated, so the best advice is to speak to a qualified advisor about your financial situation and specific goals for your future.

Belmont Health & Wealth has advisors that would love to talk to you today. Call for a risk-free appointment and start planning for your future!


Image by Gino Crescoli from Pixabay



| Categories: Wealthy Ideas | Tags: saving, investing, financial planning, future | Return
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