For many, the term "investing" can be confusing or even intimidating. But for most people, investing should be an important reality, because investing can open the door to a world of possibilities. Of course, as with any other financial decision you make, including buying a home or purchasing a car, investing requires some homework. The more educated and informed you are about various investment products and strategies, the more likely you are to become a successful investor.
Investment is different from saving
Having savings is essential towards accomplishing short-term goals or dealing with emergency situations. Investing, however, is a completely different concept, designed to help you reach your long-term goals like sending your children to college, paying for your daughters wedding, or living a comfortable retirement. Saving and investing aren't the same - although they both play a role in your financial plan. While they both involve setting aside some of your income for the future, saving often refers to putting money in the bank, while investing is mobilizing savings to meet long-term goals.
The mindset of an investor is fundamentally different than that of a saver. An investor looks years down the road, taking calculated risks to help him or her get where he or she wants to go. A saver is looking just around the corner.
