Saving and investing are concepts that are frequently heard, however it is important to know that they do not mean the same thing and that these differences are relevant when setting financial goals.
You must take into account that the amount you are going to save or invest should not be determined by the money you have left over after spending, but to begin with, it is important to define them first.
What is savings?
Savings is the portion of your income that you decide not to spend and reserve it for a specific goal that you have in the future, explains BBVA.
To save you need to have discipline. Among the benefits that it leaves you are not destabilizing yourself in the face of an unforeseen event, you do not resort so much to credits; you are prepared for the future and it helps you meet your goals, details the bank of Spanish origin.
Saving is related to the purchase of goods or services in the short term, and the money is deposited in a piggy bank, an account or bank promissory note; in direct CETES, you enter a batch or keep it under the mattress, explains Banxico Educa.
What is investing?
When you invest your money, you give it up for a while to meet medium and long-term goals, and to generate profitability.
By investing your money you protect it against inflation, something that sounds good when the consumer price index in Mexico was 8.16% in the first half of July, according to data published by the Inegi.
To choose the best investment instrument, Banco de México has an indicator called (GAT), in which you can compare the performance offered by different instruments.
You need to take into account that what you are going to invest should not be part of your livelihood, nor put your financial stability at risk. The most advisable thing is that you do not touch that money in a period of between three and five years.
There is no risk free investment. In that sense, the riskiest instruments are those that offer the highest returns. Hence, you have to take into account your risk tolerance; If you are very stressed or impatient, it is best to choose low-risk options.
It is also important that you do not put all the marbles in one bag, that is, diversify. Currently, there are various investment funds that offer you a diversified portfolio.
Make sense of your investment
“Saving without a purpose is like a race without a goal,” says Banxico Educa, which is why it recommends that you have a motivation to save or invest.
Define something you want to buy or do and, based on that, investigate how much money you need to achieve it; sets a deadline – day, month and year – for compliance.
