It has always been considered a smart move to set aside money for your future. But it is not always agreed about what exactly to do with that money. Should you park your money into something like a bank savings account? Or should you forget about the bank and put your money into something with a little bit more potential like the stock market?

Well, it kind of depends. There are plenty of advantages of investing your money into something like the stock market and having it work for you.

1. Growing Your Money Over The Long Term

The main advantage of investing into stocks is that it comes with a great long term growth potential. In general, if you invest your money in a diversified portfolio of quality stocks or an ETF then you will most likely make a nice return in the long run. If you follow smart stock tips and do research on the companies then there is no limit to what you can achieve.

2. Income

The second advantage of investing money into the stock market is that it can give you some extra income. Dividend paying stocks for example will pay you a small amount of money periodically for each share that you own. If you own a lot of shares of stock after years of investing it can turn into a pretty nice income.

However saving your money has some pretty big advantages on its own.

The biggest advantage being that you know your money is safe. Stocks go up and down, if you invest your money into the market and the market crashes you lose all your money. But if you put your money into a bank and stocks crash you will still be ok.

So is it better to save your money or to invest it? Well, it can be nice to have a little of each.

Personally I like the idea of having a grand investment account that can grow into huge wealth over time. But, it is not something that you want to start pulling money out of tomorrow. Having both a savings account which can help you with emergencies and an investment account which can benefit you in the long term can be a good idea.

Tags: Investing, investing vs saving, saving money

This entry was posted on Thursday, September 2nd, 2010 at 11:36 pm and is filed under Market News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.