Savings vs. Investment

First we need to get our terms right. Savings is when you set aside a regular amount from your income to a fund that you intend to grow. This is where most people start. We usually used savings accounts as instruments to achieve this purpose.

On the other hand, Investment is when you start using whatever excess liquidity you have in order to maximize your returns. In other words, before one can even consider investing, he/she must have saved money. Excess liquidity is the amount that you do not need to fund definite needs in the immediate future – such as emergency expenses, planed expenses like tuition fees and so on. Any amount in excess of that, you can invest.