Savings’ and ‘Investment’

Someone is sitting in the shade today because someone planted a tree a long time ago.-Warren Buffett.

The quote exactly explains an immense importance of term ‘Investing.’ When I communicate with my clients, many times they are confused with the two terms ‘Savings’ and ‘Investment’. Yes, the both terms are different. In simple language, Savings is like a still pond whereas Investment is like a tree in which once you sow seeds it will gives you many times more. But the investment option should be appropriate as per investor’s own comfort as space.

Investment options are different for every investor. Same options will not suit to everybody as every investor has different needs and objectives.

In this post, we will see how to decide which option is suitable for which investor. For which we have to take into consideration following key cruxes:

Age of an Investor

Investment Objective

Risk Bearing Capacity of the prospective Investor

View of the Investor: Conservative or Liberal

Amount or Capital to be Invested

Responsibilities on would be Investor

Investment Term or Period

So, before every investment, investor himself should be aware of all these points so that he will grow his own wealth and not Broker’s assets.

Investment objectives comprises future oriented plans such as it could be retirement amount which is expected to give you fixed monthly returns or investment aims to save tax which varies from person to person. Depending upon the objectives, investment options are decided so we can say that investment objectives are the base for every investment.