Many investors, particularly the first timers, remain confused with regard to making a sound and profitable investment. When it comes to taking an investment decision, then they are not able to decide whether they should invest in the stock market or use cash in hand or invest saved money in other financial instruments.
If you are also going through the same situation, then it is highly important that you must find a better solution to this question, whether you should save money or invest in shares? Getting a right answer to this question will not only clear all of your doubts but also help you to achieve your financial goals. Now, the main question arises here is from where you can get the right advice? Well, there is nothing to stress about as there are many online stock market advisory companies that can guide you effectively and help in the better wealth accumulation.
Before arriving at any decision, it is imperative to understand the basic difference between the stock market investment and saving money. So, let us see the difference between the two terms:
- Investing in the Stock Market: It means using a certain amount of money to buy the shares of the same or different companies with a hope that their price will rise one day and give you profitable returns.
- Saving Money: It generally means putting a certain amount of hard cash in the bank or financial schemes for getting quick returns.
When to Invest Money in the Stock Market?
If you have any long-term goal, then it makes a great sense to invest some portion of the money in the stock market to realize your financial objectives. You should invest in the shares for:
- The education and marriage of your child: It cannot be denied that the education or marriage of your child requires a lot of money and you cannot depend upon your salary to take care of the same. In such a situation, it is extremely important that you must plan to invest in the stock market wisely and accumulate a great financial wealth over a period of time.
- Your retirement: Do you require the money when you grow old? If your answer is yes, then there is nothing better than investing in the stock market to have a second source of income. You must invest in the market for the long-term keeping in view your retirement. It is better to have a stable income at an older age than being dependent on others.
- Purchasing a new home: Who does not want to have their own home? I think, most of the people in India have a dream to have own home, but somehow, they are forced to live in the rented house because of their low salary. Stock market investment proves to be an excellent mode, through which you can expect to make good money if you invest money for the long-term basis, get the keys of your dream home and cherish unforgettable memories with your beloved family members.
When to Save Money?
There are certain circumstances in which you are required to save money, these are mentioned below:
- Paying for rent and food: If you are the sole breadwinner of your family, then you are required to save money by paying rent for your apartment and taking care of daily expenditures.
- Buying a new car: You may be having a dream to buy a car and to materialize the same, it is important that you must invest some percentage of money in your savings account consistently to get the keys of your dream car.
- Paying the school fees: Providing the quality education to your kids is extremely important and for this, you are required to pay fees. Having a cash in hand to finance the school fees is extremely important and you cannot neglect it.
- Taking care of everyday household necessities: There are some daily household expenses that must take care of in a very efficient manner. It is imperative that some part of your income must be allocated towards taking care of the household necessities without any inconvenience.
It is important that you must analyze your needs first and then take an ideal decision whether to invest in the stocks or save money in different financial schemes. If you are still not able to arrive at a right decision, then you can seek the assistance of a certified financial advisor who can guide you effectively in taking an informed decision.
Note: All information & data provided in this article is for the educational purpose as well as to give general information on the finance & economy, not to provide any professional advice or service. Views & opinions are not biased against the company and do not affect any official policy or any other agency, an organization within the content.