The importance of saving and investments economics essay

After reading this essay you will learn about Investment: Meaning of Investment 2. Importance of Investment 3.

The importance of saving and investments economics essay

A shared characteristic of both savings and investing is the upmost importance that they play in our lives. If you are not doing either, the time is now to get started. See, 10 ways to effectively save, to help you start saving.

A general rule of thumb is we should not save long term but should invest long term. We should not invest short term, but save short term. Also, keep in mind for both savings and investing that when risk goes down, liquidity goes up and vice versa. To start, the biggest and most influential difference is risk.

The difference involved with savings and investing, are much different and important to differentiate. It has little risk of loss of funds but also has minimal gains. When you invest, you have the potential of better gains or rewards, long term, but also the potential for loss.

Expanded Options

You risk more in investing for a larger return, but your potential loss is available as well. It is important to review your goals and see what the best option for each is, saving or investing.

Done incorrectly, it could cost you a lot of money in fees or loss of potential income, earned through investing. We save for purchases and emergencies.

We save for things that need a vehicle to sit in, available when we need them and have low risk of losing value.

Why Saving Money is Important | Investopedia

It is important to track your savings, put a deadline or timeline to your goals and a value. You then know how much you need, how much to save monthly and the ability to take the money, without fee to spend on that treasured vacation.

When investingit is important not just to invest, but invest wisely. Understanding different investment vehicles, what they are for and how to use them will be imperative to being successful.

The importance of saving and investments economics essay

We use specific vehicles that allow for growth, like these. Long-term college plans, like the ones reviewed in this articlecan help you to direct that goal, successfully.

When saving for retirement, it is marked as the end of your income earning years but the desire would be to utilize funds invested throughout your working years combined with any employer pension plans, Social Security benefits, annuities or other long-term investments.

There are many options to start or continue your retirement funding. Another difference is interest, or money made. In investing, we want our investments to make us money vs. A certificate of deposit is another savings tool.

This tool is relatively short term, ranging from a few months to many 7 or more years.The Importance Of Savings Economics Essay Abstract. During the last years the banking business has come under considerable competitive pressure and bank managers often express concern regarding its savings and credits vis-à-vis other activities.


The importance of saving and investments economics essay

In political science it is vote and in economics it is money. Money is the queen among all these fundamental discoveries.

Everyone can agree that saving money as early as possible will help one and his family to achieve more stable life than Author: george paily. Mar 01,  · Savings and investment are mutually interconnected economic variables. When we examine the importance of savings, it is very essential to understand what is the role of investment in one’s life.

Keynes’s psychological law of consumption shows that income is not equal to expenditure and it makes a gap between income and george paily. The Government of India has opened many saving schemes like postal savings, bank cumulative time deposit, defense fund, national savings certificate, life insurance and so on.

People should take advantage of these provisions. National saving equals private saving plus public saving. A government budget deficit represents negative public saving and therefore reduces national saving and the supply of lon able funds available to finance investment, it reduces the growth of productively and GDP.

Saving money is incredibly important. It gives you peace of mind, expands your options for decisions that have a major effect on your quality of life and eventually gives you the option to retire.

Pocket Smart: The Importance of Saving Money