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Truth is, it’s your decision to make whether savings or investment is the better route to achieving what you are aiming at, however, for certain goals, one is definitely better.
We are going to evaluate both, look at their pros and cons, and then let you make the decision.
Whether it’s your first salary or you have been earning for over 20 years, it can be unclear or a bit daunting to know when you should be saving and when you should be investing.
For many, saving is the safer route because it’s perceived as faster, the amount in your bank account won’t typically decrease unless you withdraw funds, it is also easily accessible, but interest rates on savings accounts don’t allow your money to grow very quickly.
Investment however has the potential to produce higher returns, but you will need to wait for a while and be willing to take some risks.
So, how do you know when you should stick to the safer route and save or risk more to earn bigger returns and invest? Here’s what you need to know.
Pros of saving
Saving rather than investing allows you to reach your goal on time as long as you save the proper amount each month.
Take the total you need to save and divide it by the number of months until you need to reach your goal to find the amount you need to save each month.
Cons of savings
Due to inflation, the money you save will decrease in value each year. If you earn interest, that interest may partially offset the negative effect of inflation. Unfortunately, interest rates rarely keep up with the rate of inflation.
Saving also means you’ll have to set aside more money each month than you would if you received higher returns on investing.
If you’re only earning one percent interest in a savings account but could earn an eight percent return on investing, you’ll have to make up for that seven percent difference by putting more money in your savings account to reach your goal at the same time.
Pros of investing
Investing can be beneficial too, than it could in a savings account.
If you have a long time until you need to meet your goal, your returns will compound.
Basically, this means in addition to a higher rate of return on investments, your investment earnings will also earn money over time.
The benefit of higher compounding returns is you won’t have to invest as much each month as you would need to save each month to reach your goal.
Cons of investing
When you opt to invest rather than save your money, you will have restricted access to the money over the period of the investment.
That means unlike savings, you can’t just go to the bank and withdraw the money, you have to pass through some official liquidation processes, and depending on the financial house you are using, it could take hours or days before your funds hit your account.
This is one of the perks of investing with Page Financials, we process customers’ investment liquidation requests in less than 24hours.
So, which should you choose?
Like we established earlier, this is completely your question to answer depending on what you want to achieve.
However, as financial experts, we suggest that you pay more consideration to investing because as you can see clearly, it yields more returns.
This is basically a smart way of getting your money to work for you.
In the past, people used to be hesitant about investing due to the perceived complexities associated with it, however, the influx of financial houses in Nigeria has made investing or fixed deposits simpler and transparent.
You just need to either call or send an email to our customer service, and you will get answers to all your questions.
When is the right time to invest?
Financial analysts have long adopted the old Chinees saying “The best time to plant a tree was 20 years ago. The second-best time is now.”
You see, investment is like planting a tree, it grows daily and fleshes out into maturity as the years go by.
Whatever it is you want to do in the future, now is the time to start investing.
The longer you delay in getting starting with investing, the more money you will need to put away monthly to be able to achieve your target.
How can I begin?
Contrary to popular belief, investing is very simple, if you can logon to Facebook and create a new account, then you can also open and setup an investment account for yourself with a reputable financial institution.
At Page Financials we have made this process so seamless that you can setup an investment account in minutes.
All you have to do is visit www.pagefinancials.com navigate to our investment page and select the investment plan that suits your goal.
We have the Target Plan; Whether you plan to buy that eye-catching luxury car, purchase a beautiful house, go on a getaway-trip, fund your child’s education abroad, plan your wedding or even a naming ceremony, our Target Plan Account affords you the flexibility to save at your convenience with good interest rates.
There’s also the Investment Note; If you have some extra money that you won’t need for a while, lock it away in an Investment Note and watch your investment grow. With a fixed rate of interest and a choice of terms, you can be sure of what you’re getting.
Each is structured in a way that suits specific goals in terms of tenor, nature and amount.
Ready to start investing? Or want to start another investment line?
Visit our website now or if you need to speak with an expert first, kindly call 016317342 to get you set up.