By: Myrna Salanguit
You may be asking the difference between saving money and investing money. Saving is putting money aside for a projected expense – to pay for a child’s college education, for a rainy day, or for a down payment on a house or car. Or probably you want to be sure you have six months’ wages saved in case of a dire emergency.

An investment, on the other hand, is something you put your money into that will make more money for you like a business or an interest-bearing instrument. Comparatively, there is a higher risk involved in investing than in saving but the returns are much, much higher when you invest.

According to Ron Lipsman, author of ‘You Can Do the Math’, the difference between saving and investing money is not the vehicle in which you do it, but rather the purpose intended for the money as well as the certainty of its future status. He says we save money in a safe, reliable, predictable way for a very special use later on or just to keep it from getting lost or spent. Or we invest money in a way that is bold, aggressive and risky for the purpose of accumulating wealth.

Ron Lipsman wants us to have a mind-set of always investing our money and hardly saving it. Putting money in a piggy bank or in a cash box is merely saving it. Putting cash, jewels, gold or other valuables in a safety deposit is another way of saving. For him, even parking money in a low-risk savings account with the purpose of earning a fixed amount by a fixed date is, if there is any return, a form of investing. We have to focus our mind on how our money can grow via investments rather than just preserve it via savings.

Work on insuring an income for your future. When your savings reach an amount that you are comfortable with, you can start investing. But first study and discover the different venues for investing. Take the necessary precaution in choosing where to put your money. Do not be swayed into a scheme of getting easy money. This is very risky. If it promises a very high rate of return, give it a good look. Investigate. More often than not, it‘s a scam. You may just find your money disappearing into thin air. It would be helpful to spend time in researching about the past and current pyramid scams.

Where to keep those hard-earned savings? Here are the financial baskets available in the market today where you can invest your money:

• SAVINGS DEPOSITS
• TIME DEPOSITS
• T-BILLS
• RTBs (Retail Treasury Bonds)
• MUTUAL FUNDS
• VUL (Variable Universal Link)
• UITFs (Unit Investment Trust Funds)
• STOCKS
• FOREIGN CURRENCY
• INSURANCE PLANS
• PENSION PLANS

MYRNA SALANGUIT is our KA-PINAY Investments Counselor. She is a Mutual Fund Representative of Sun Life Asset Management Co Inc., a Life Insurance Consultant of Sun Life of Canada Phils. and Sun Life Financial Plans Inc., and a professor of Financial Management at San Beda Alabang College.

Magazine

• Finance & Investment