Investment and saving have been used synonymously for a long time, people who do not follow investments by heart generally are seen quoting savings as investing and vice-versa. The two terms have been used interchangeably for a long time but on actual grounds mean a lot different.
In fact there is a fundamental difference between the two terms- one aims at keeping aside a portion of your hard-earned money which even if kept for 10-20 years will not make a penny more or change whereas on the other hand when we talk about investing it is more of putting your money to work such that it grows itself and builds wealth for you.
It is okay if you save some portion of your money to maintain the liquidity but keeping it all aside is not a wise thing to do. You can plan your investments as per your risk profile and money at hand but do not aim towards parking it all in a savings account.
Investments are the only way you achieve your long-term goals in a considerably short time while making the most suitable investment decisions and proper asset allocation.

Key differentiating factors

Tenure
Tenure is a great factor which needs to be considered while managing the money. If you already know that you are going to need money in a short-term, it is okay that you keep that money liquid and put it in savings. But if there is nothing like a short-term need for liquid money, you must put into investments. Investments are for the longer term and help meet the long-term goals. If you start investing early, your goals will be realized soon.

Liquidity
The next major concern is of liquidity; if you already know of any upcoming situation that would need liquidity then keep some money in savings for it to be handy. During the normal course of life, it is better that you invest your money and let it grow. Even in case of investments, you can choose a mix of funds some of which provide real-time liquidity like liquid funds.

Risk
The third factor to be considered is a risk. If you are a highly risk-averse person and absolutely cannot take any form and portion of the risk, you may consider investing your money in fixed return instruments. If you are a little flexible with your money and believe in your speculations, you must try mutual funds which are available in various forms and types.

Returns
After risks come returns. These two are related factors as if you can put your money at a little risk then only should you expect greater returns. If you have no tolerance for risk then you have to settle with fixed return instruments only.

Purpose
The final and deciding factor is the purpose. Find out what do you want to do with your money and why? You will find answers to such questions in your long-term goals. If only managing the household and casual expenses is your goal then savings may do but if there are certain goals towards which you are moving, only savings will not suffice. You need to identify the right investment avenues and invest smartly.

How to start investing?
You can start investing by going through a considerable amount of data in order to understand and time the market. A little homework would always be desired as you would not want to make the wrong decisions. The better way to putting your money in the market is through the help of a financial advisor. An FA is one who keeps track of the market movements and is well aware of the do’s and don’ts. Start investing with PIGGY to get the best services at hand and select from the widest and most select range of funds as per your suitability.

If your purpose with money is to increase or build wealth then investments are the only way out. If you wish only to manage your households and maintain the normal living standard (which also will fall prey to inflation) then you may consider going for savings only. Since the living standards are inflating and there is always a scope for better, try investing your money to feel the change for the good.

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