Post
Topic
Board Economics
Re: Is it better to save money or invest it?
by
Ailmand
on 26/11/2017, 21:27:08 UTC
Investment means giving the money to someone who uses it for their business and pays you back a dividend (and you normally get some kind of share that can be sold later). Think stocks.

"Save in bank" is actually a kind of investment. You give money to the bank, they use it for their business and give you a small interest (if at all) as dividend, and you can withdraw your money. With current interest rates, this is pretty boring, the only advantage compared to keeping money in a safe at home is that it's easier to do most types of payment, and that you don't need your own safe...

Buying precious metals is not an investment because those metals won't work with the money you paid for them. It's mostly speculation (you hope that you can sell it for a higher price) and safekeeping (real value of money can fall due to inflation, while precious metals will mostly retain their "real" value). But you need to consider storage fees.

To decide which is better you need to know what you consider "good".
Do you want to maximize your ROI? Do you want to store your wealth safely? Do you want to enable entrepreneurs to build their businesses?

Onkel Paul

Good point. I think the essence of investing lies in that fact that you are using your money, although with appraisal of risks involved in your favor instead of just saving it and no actually earning anything or using it for a specific or special purposes. Having said, it's a passive way of earning money by just using your cash or savings as your capital. In the ICO market, you are similarly funding a starting up company to help them prosper, and once they do, they can bring back your money plus your earnings from it.