Saving
and investing aren't the same — although they both
play a role in your financial plan. While they both involve
setting aside some of your income for the future, saving
often refers to putting money in the bank — in savings
and money market accounts — while investing means
buying stocks, bonds, mutual funds, and other uninsured
assets (certificates
of deposit and U.S.
Treasury bills fall somewhere in between).
When you save, you're preserving your money for a later time.
When you invest, you're taking some risk that you believe
will make it possible for your investment to grow in value
over time. While investing can help you achieve your long-term
goals, saving is an effective way of managing your money
to meet short-term needs and to provide a safety net for
emergency expenses.
