Investment and Saving - Introduction to Indian financial system, Interdisciplinary

every successful investor must begin by
understanding the difference between
saving investing and speculating if you
get those confused you run the risk of
losing a lot of money let's start with
saving saving can be defined as the
process of setting money aside in order
to make a purchase a short time in the
future typically under three years the
most important element when it comes to
saving is the safety of your money you
don't want the value of your savings to
fluctuate because you'll need all of it
to make your purchase there are several
options available to help you save money
savings accounts money market accounts
and certificates of deposit for example
unfortunately as a trade-off for
protecting your money saving typically
pays interest at a rate that is just a
bit higher than inflation if you want to
earn more than that you'll have to look
to investing unlike saving investing is
a long-term process it often involves
committing a portion of your money to
owning a share of a business with the
expectation that you'll receive a higher
return than inflation the most important
factor in investing is the growth of
your money and there are many ways to
invest with stocks bonds and real estate
being the most popular however once
again there is a trade off while
investing typically offers better
returns than saving it also carries more
risk as the value of your investment
bounces up and down at least when looked
at in the short term to be a successful
investor you must invest your money for
at least three years that's because over
longer periods the value of your money
will appreciate enough so that even if
the value of your investment falls over
a short period of time it will still be
higher at the end of the period than it
would have been if your money had been
sitting in a savings account but what if
you need to grow your money quickly
that's where speculating comes in
speculating involves putting your money
risk with the hope that you will earn a
high return in a short period of time
day trading is a good example of
speculating where stock trades are
opened and closed in a period of minutes
or hours speculators can win big but
they can also lose everything so to sum
up save to protect your money invest to
grow your money speculate to gamble your
money