Investing Versus Saving
Is there a difference?
This short essay will give you insight and direction on this subject.
Immediately when I hear this topic I know that someone does not know the difference between investing or saving. The most common sage advice we hear from our employer and parents are " Save your money into your jobs 401(k)." What's not mentioned is the 401(k) is a stock investment. Our friends will say, "save your money in your bank account." Now you have become unsecured lender. or Uncle Terry will say " I rat hole into my pension." Another investment vehicle....what gives? Money, Dinero, cash what is it exactly? You must understand the basics of this before you can begin to wrap your mind around if you are saving or investing.
First, money must fit these characteristic types
1.Durable
2. Nonperishable
3.Fungible
4. Portable
5.Scarce
The fifth is commonly violated. Money is obviously a medium of exchange, but what is being exchanged? Your energy. Money is the evidence of energy transferred. If you go to work, you receive a check in exchange for the energy you put out to complete the task. The check is evidence of this. Now this is a very basic understanding and the money rabbit holes goes deep. You have M1, M2, and M3 money. There is Fiat versus sound money in the mix. This will be sufficient to get you to understand where we are going next.
Saving well in this world says a-lot in a little. When you pace yourself you are saving energy to let loose when it's time. So simply put, when you are saving money you are saving and building up your energy so it can be released at a later time for an intended event. So what are some of the ways to save money? Gold, silver, and bitcoin. They fit all of the characteristics of sound money. Another way is insurance reserves which helps bring back some balance to the fiat system. There is a-lot more to the why on these things, but we will cover later.
Investing is when your money is working hard for you. It has already been deployed and has an assigned task. So when you use a 401(k) (which I would never touch with a 10 foot pole!) You're putting your capital to work for you. The goal is to bring back more money. It is you also taking on more risk than usual. So that is why you receive higher returns on certain investment.
Hopefully this added some clarity for you. If you would like to learn more about our services you can schedule a free consultation. Now go seize the day
- sincerely Elijah AKA Bank Trapper