InvestorQ : How are savings different from investments?
Diya Chitale made post

How are savings different from investments?

Riya Dwivedi answered.
2 years ago

Instruments of savings don’t create wealth. Be very clear about that. One needs to understand the subtle difference between savings and investments here. While savings help you park your idle money for a small return, the intent in savings is just to earn more than inflation. Savings do not create long term wealth, nor does the saver participate on the up-side if the end use of the funds turns out to be extremely profitable. For wealth creation, savings need to be translated into investments.

Where exactly does your investment journey begin? One can argue that you begin your investment journey by articulating your goals. You can also argue that your investment journey begins when you make your allocation decisions. But the real journey of investment from a practical standpoint begins only when you write a cheque and make an investment. That is when you actually become an investor.

Remember, investing is not exactly rocket science. But then it calls for a lot of knowledge, analytical skills, diligence and discipline. Also, you are committing your hard earned money and you surely want to make your money grow. The first task, therefore, would be to select your broker or you advisor who will be your ally in your investment journey. But how exactly do you select your broker in a market that is crowded with brokers with each broker claiming to offer superior service and best research at the lowest price?