Question

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elaborate on the difference between investing and savings in terms of the following:

• Growth of your money
• Risk involved
• Return on investment
• Timing of the investment/savings returns.

Answer 1

- Growth of the money -> Investing is buying assets such as stocks, bonds, real estate, etc. with an expectation that the money would grow over the time. Savings is setting aside money you don't spend now for emergencies and future purchases. Savings doesn't hep in money growth

- Risk involved - Investing does involve risk. The type of risk depends on the types of investment. For example, bonds have the least risk whereas real estate have a high risk. In contrast, savings have very little no or least risk.

- Return on investment - Return on investment on investing can be either positive or negative. It depends on the type of assets invested in. High volatility assets typically have higher risk and thus the return on investment is very high.

- Timing of the investment/savings return - Timing of return in investments depends upon the type of investments, For example, investing in real estate takes longer to give superior and higher return as compared to bonds and stocks. On the other hand, the return on savings is minimal which is provided by the financial institutions as interest.