I’m Saving Money, So Why Invest?
I feel like I’ve mastered the concept of saving money. Like Suze Orman recommends in The Money Class, I live beneath my means and any money that I don’t spend by the end of the month, I put it into a savings account and pretend like it doesn’t exist unless a financial emergency arises. Saving is one way to build wealth, slowly, but I’m quite comfortable with that. When I think about other ways to make my money work for me, I always get terrified when I hear these two phrases: STOCKS and WALL STREET!
Every now and then I do read about stocks and Wall Street and I gain a slightly better understanding of how investing works. Most recently, I read a helpful article on About.com that explains the difference between saving and investing. It explains that saving is a passive way to earn money and investing is a proactive way to earn money. I understood this because putting money into a savings account will allow you to make money but at very low interest rates. When you invest, you have some ownership in the company and can sell your stock to make a nice profit if the company is performing well financially. Unfortunately, investing comes with the risk of losing money, which is what terrifies me. I do know that if you carefully study the stock market, you can learn how to skillfully grow your money.
There’s nothing like watching your money grow without having to clock in and out of work!