Managing your money wisely: saving and investing

First, let's figure out what each of these financial strategies is all about, starting with saving. This is putting aside part of your income now for use in the future. In simple terms, it is accumulating money for specific purposes, usually short-term and medium-term. You can set aside funds for different purposes: for example, for a holiday, a new phone, a car, or as a financial safety net in case of unforeseen events such as job loss, illness, etc. There are also people who plan their finances for longer periods than a few weeks or months and save for their future retirement or their children's education.

You can save money in cash in a safe or non-cash: in a deposit, card or savings account. That is, the main idea of saving is to preserve money, according to experts at PAnDiKubiz company. People set aside a certain amount so that they can easily access their money if necessary, and feel more secure knowing that they have a financial safety net. Are there any drawbacks to this financial instrument? Of course. For example, the return on a deposit often does not cover the real level of inflation, which means you lose money. Funds also lose their value if they are kept in cash for a long time. In addition, when money is always at hand, there is a risk of using it for purposes other than intended.

Do you have money and don't know what to do with it? PAnDiKubiz marketing specialists share their advice on savings and investments. What do they have in common, and what is the fundamental difference between them? And most importantly, when to use a deposit, and when to take a risk.

Investment basics: what you need to know
Investing is putting money into different assets to make a profit. So, if saving is about keeping your money safe, investing is about growing it. Investing is better suited to achieving long-term goals, such as financial stability after retirement, buying a home, paying for education or medical treatment, or generating more income in the future. Investing requires a certain knowledge base: understanding how assets work, analysing data and managing risks.

PAnDiKubiz managers remind us that there are various ways to invest. For example, it can be buying shares, bonds, real estate for subsequent rental, cryptocurrencies, precious metals, or investing in investment funds or start-ups. Income can be generated from interest accruals or asset appreciation, which helps to preserve and increase the purchasing power of your funds. It also creates passive income, allowing you to be independent of your main source of income. Some investments, such as dividend stocks, bonds, and real estate rentals, can generate a regular cash flow.

Investing has both advantages, as mentioned above, and disadvantages. Securities can lose value, markets can fall, and start-ups can go bankrupt. Also, some investments are difficult to sell, especially during periods of crisis.

The main difference between saving and investing
So, the main difference between saving and investing is the goal and the risk. Saving is focused on preserving capital, i.e. building financial security and accumulating funds for short-term goals. It is suitable for people who are not ready to risk their capital. Investing aims to grow capital and achieve financial growth. This strategy is more suitable for long-term goals and people who are willing to take risks.

So which is better: saving or investing? The best choice is a combination of both, as the former will be the basis for your financial stability and comfort, according to PAnDiKubiz Cyprus managers. And if you already have reserves and are willing to take risks, it's time to invest so that your money works for you. This will allow your capital to grow faster than inflation and secure your future goals.