BiafranBushBoy:
Savings vs. Investments: Which should you, go for?

The longtime debate stands between Savings and Investment, which is better! Before you come into the post and scream “Investments”, I sincerely want you to read and digest the post.


Savings, as written in this post doesn’t mean the regular bank savings account. Please refer to the previous post for more details.



You must have come across this quote that compares savings and investment before “Investments make you rich, while savings make you poor”. This is absolutely false and would never be true. Financial illiteracy is the reason why many people keep losing money in the financial market and blame the devil for such action.

This post would help you decide whether you are ripe to create investments, or you should build up your portfolio with a good discipline savings culture.

Difference between Savings and Investment

Is there any difference between these Savings and investment? The answer is yes, and I will explain below.

“Saving is an Investment, but an investment isn’t saving.”

The above statement has been proven correct by financial experts, and I will show you an example below.

According to TheBalance, “Savings helps you make money while investing MIGHT help you build wealth”

Putting the above statement in another way, when you invest, you are more likely to lose your money and become poor than when you save.



The basic difference between Savings and Investment is just the Profit margin and risk factor.

Savings = Zero Risk investments + Low-profit margin.

Investing = High Risk + High-Profit margin.

This simply means that Savings can be called investments, but investments cannot be called savings.

A friend of mine had 600k Naira in his account and invested about 400k in setting up a poultry farm. After 4 months, all the bird suffered from a particular disease and died. He was left with just 200k to plan his life again.

A woman has 1 million Naira in her account and invested about 900k in a particular share she was advised to buy. The Share lost its value and she came back home empty-handed.

“What a way to spend her hard earned money”

There are also success stories of people who invested and got out successfully, but in investing, it is nothing but pure luck and a little bit of financial literacy.

A particular popular firm in Lagos known for it rich financial background has been declared bankrupted and taken over by the appropriate body. Shareholders and stakeholders have gotten their fingers burnt, which means Goodbye.

Things to do before you decide to Invest as a Starter

1. Have robust savings account far from your reach

A lot of people contacted me after my last post on how they could invest. After I talked to them about the need to save money before investing, I became a prophet of doom to them. They forget that the fastest way to lose money or gain money is to invest. This is a big difference between Savings and Investment

As a low salary earner, a working class person with a family with no major savings, young people building their lives, saving for a while will give you the leverage to invest.

"Investment portfolios will never stop to cease, but saving requires discipline and focus."



It is impossible to find an investment with so much upside potential without excessive risks to it. Imagine looking for an investment portfolio with an interest margin of 40%, yet you aren’t willing to lose money. It doesn’t work that way.

If you don’t have reserve savings account with more than 500k Naira, then you shouldn’t think of investing in any major portfolio.

You can’t have an account balance of 100k (Home and abroad), and you are thinking to start a business with all of it. Have you calculated your risk factor? Maybe you should just employ me.

Consider your Debts, Cash Flow, and Liabilities.

A married man with 2 kids already has lots of liabilities to consider. The wife, home, kids, school fees, car, and etc are enough debts to consider already.





There are several savings investments to invest in, and I will be willing to share in my next post. You can just subscribe and I will inform you when it is out. The basic truth is that you should consider Savings and Investment.

The key to saving like I discussed in my last post is avoiding the banks (Where you won’t touch your money)

Save for a while before you invest

According to Warren Buffet (the chief saver), he said “Investments might make you rich, but savings will never make you poor).

One advice I give my clients is that before they decide to invest, they must show me their savings balance.

While you decide to save, you should consider a long-term plan that would enable you to accumulate your money and have a wonderful reserve account.



Avoid High interest and High-Risk Portfolios as a Learner

The brokers won’t tell you this (sorry I am bursting their bubble). Stockbrokers and other financial brokers survive through the money you invest.

As a learner, avoid investment portfolios that promise unrealistic ROIs. They will sucker you in and unload dogshit on you.

I have lost thousands of Naira on several high-risk investments, and I have made millions from high-risk investments too. So I know exactly what it feels like.

If you have worked as a working class person with an average salary of 45k for above 3 years without a savings balance of 800k Naira. What you need is financial discipline and not investments for now.

Accumulate money with savings, and build wealth with investments. That is the relationship between savings and investment.

Recommended Book to read: “Richest Man in Babylon” by Napoleon Hill

Just remember that when it comes to taking tough financial decisions, you might grow cold feet. Spending money is actually sweet!

Just visit the blog by using the link, and subscribe for more exciting posts. Thanks to all those who bought me beer the last time, I hope to get more. Smiles… bye!

http://topwritersden.com/savings-and-investment-difference-and-guide/

BiafranBushBoy Good sensible write up , it makes a lot of sense , I used to believe in emptying my savings accounts to investment opportunities , great mistake , I lost a lot of deals or projects because I didn't have enough savings for emergency back up cash -especially when the deal or project needs cash due shortfalls , learnt my lesson now , am building up savings and an investing when I have surplus cash ..for example I bought a property recently , however , the broker forgot to add some regulatory government fees , at the end of the deal I was asked to pay extra 10 % or I will lose the property , imagined I had no savings , I would have lost the property and all the initial deposit , lesson learnt ..

The Richest man in Babylon,
Sam Adeyemi's Parable of dollars
Money Master the game by Tony Robbins
The A-Z of personal finance by Nimi Akinkugbe
School of Money by Olumide Emmanuel
Secrets of the millionaire mind

I deliberately added books by Nigerian authors as these are written purely from the Nigerian perspective taking into consideration our peculiar economic and financial climate.

Check my signature to order for these books. Free and fast delivery for orders of 4 or more books anywhere in Nigeria if you are a Nairalander. Indicate that you're a Nairalander when placing your order.

Manus17:
which books can I read concerning the financial discipline?

Manus17:
which books can I read concerning the financial discipline?

Read also.. "Rich Dad.. Poor Dad "

rhames:



I am keeping the sum of ten million naira to invest in the upcoming shares of MTN Nigeria plc. That is an investment i believe.

You better have more than 10million in reserve. Lol

bellville:
The Richest man in Babylon,
Sam Adeyemi's Parable of dollars
Money Master the game by Tony Robbins
The A-Z of personal finance by Nimi Akinkugbe
School of Money by Olumide Emmanuel
Secrets of the millionaire mind

I deliberately added books by Nigerian authors as these are written purely from the Nigerian perspective taking into consideration our peculiar economic and financial climate.

Check my signature to order for these books. Free and fast delivery for orders of 4 or more books anywhere in Nigeria if you are a Nairalander. Indicate that you're a Nairalander when placing your order.

How are you ma'am ...

Longest time

BiafranBushBoy:


How are you ma'am ...

Longest time

My oga!!!I am very fine. How's work? I love your post.

BiafranBushBoy:


You better have more than 10million in reserve. Lol

I am a high risk investor. I wanted to sell off my prime property worth N25 million but have not got a buyer to fulfill my N30 million target. I am a business man in the fast moving consumer goods business.

rhames:


I am a high risk investor. I wanted to sell off my prime property worth N25 million but have not got a buyer to fulfill my N30 million target. I am a business man in the fast moving consumer goods business.

Wow... Take me along in your kingdom... Lol.

I would be so glad. Nice one Sir.

bellville:


My oga!!!I am very fine. How's work? I love your post.

Thanks ma'am...

How do I contact you.

BiafranBushBoy:


Thanks ma'am...

How do I contact you.

08084244904; 08149279674

BiafranBushBoy:


Wow... Take me along in your kingdom... Lol.

I would be so glad. Nice one Sir.

It took me more than 20 years to build that business but not without so much failures to learn from. I lost N7 million plus in the 2008 stock market manly to bank shares and instead of liquidating it, i kept it there until my stockbroker advised that I should liquidate them which fetched me just above N3 million. He further instructed that I should buy Nestle PLC shares at N105 then. I sold some when it got to N2000 per share and expanded my business seven years ago.

Nestle shares for me now is a lifelong investment that i intend to leave for my kids not liquidating them. Thats the kind of vision one should have.

My take is research extensively on any investment before making a final decision.

Gkemz:
It's easier to save than to invest but it's more profitable to invest than to save. Also it's more risky to invest than to save.

Finally, don't invest what you can't afford to lose.

That's the bottom line

rhames:


It took me more than 20 years to build that business but not without so much failures to learn from. I lost N7 million plus in the 2008 stock market manly to bank shares and instead of liquidating it, i kept it there until my stockbroker advised that I should liquidate them which fetched me just above N3 million. He further instructed that I should buy Nestle PLC shares at N105 then. I sold some when it got to N2000 per share and expanded my business seven years ago.

Nestle shares for me now is a lifelong investment that i intend to leave for my kids not liquidating them. Thats the kind of vision one should have.

My take is research extensively on any investment before making a final decision.

Beautiful!
I had to log in to like and comment on this.
Nobody ever got rich through savings alone.

Looking at the dangotes and the otedolas... They all made investments which paid off. They didn't become rich from putting their money in the banks and letting it sleep there.

Op forgot that you learn when you make investments which further shapes your decision making and investment skills but you never learn a thing when you put your money in the bank.

Sorry Op, but you are preaching the mindset of an employee which is less of what we need in our country.

Putting your money to create business while becoming an employer of labor is also investing.

So many hard truths in the article..

Some points i disagree with, but in life as always , our individuality plays a major role in our accumulated serendipity...

BTW Richest man in Babylon was by George Samuel Clason....U said Napoleon Hill up there...

Great write up!

Try my company's ARM MONEY MARKET then you will know that there's a big difference in investment

BiafranBushBoy:


Everybody's favourite.

Indeed!!!

BiafranBushBoy:
[b]




According to Warren Buffet (the chief saver), he said “Investments might make you rich, but savings will never make you poor).

I like these quotes.

I would like to appreciate this post and it's a brilliant one but i would like to say investment is savings, savings entails setting a sum aside for future use and thats exactly what investments does but in addition you become more financially responsible in investing than savings, sir savings can be lost also...nothing is safe nothing is sure, i would not want to banter your post but give you an example of the solution to deciding between investments and savings, and that is in insurance. Under one of the several packages offered by an insurance company there are some that is strictly on savings with interest rate plus if a loss occur you get renumeration and if there is no loss you get paid back your money with bonuses after the contract plan expires, so picking up an insurance plan is best solution and savings is not really better off..

You make me remember this book, 'Cash Flow Quadrant' by Robert Kiyosaki.

I love this!

In Economics, S=I

Noo...saving is not better than investment, people loss money investing because most times they are too lazy and always in a hurry to make money and not necessarily become a solution to a problem.

They usually lack the financial intelligence, business acumen or technical know-how to man this investments. Their concept and understanding of investment is putting money somewhere and just coming to collect interests monthly or weekly like a landlord! (that's why MMM and other ponzi schemes really dealt with Nigerians)

Every investment is like a seed, the farmer first studies the seasons, plants in due time, waters, weed the surroundings applies fertilizer, applies pesticides...

A typical example is owning a hostel, let's say you bought it some 5years ago for 10million naira, rented it out and have received 1 million per annum in the past 5 years, that's like 5 million in rents. OK let's say you spent 1 million on maintenance, taxes and miscellaneous. You have 4millon left as profit, right? You still have your building whose worth would have reached 15million or more 5 years later, + your accrued rents of 4 million that's 19 million in total.

Now assuming you kept all that 10 million in the bank 5 years ago, at an interest rate of 4-5% per annum that's 500k * 5= 2.5million naira + your original 10million =12.5 million. Now the ugly truth is that this 12.5 million would not even be up to your original 10 million in value because inflation would have decimated it so badly.

In conclusion,(intelligent) investment is the best form of saving.

JhyMedex:
So many hard truths in the article..

Some points i disagree with, but in life as always , our individuality plays a major role in our accumulated serendipity...

BTW Richest man in Babylon was by George Samuel Clason....U said Napoleon Hill up there...

Great write up!

Thanks. Thanks for the correction also.

BiafranBushBoy:


The richest man in Babylon

Think and grow rich.

Psychology of wealth.

The problem isn't reading the book, the problem is not implementing what the book says. Goodluck.

lalasticlala, survey this thread first na

Can you please share me any of these books?
Funshosalman @gmail.com

Abaasit4real:


Can you please share me any of these books?
Funshosalman @gmail.com

I don't really have any of the books softcopy. You can check them out or buy. Not quite expensive.

BiafranBushBoy:


I don't really have any of the books softcopy. You can check them out or buy. Not quite expensive.

Ok! Thanks!

winterfell007:
Investment is the better option. i will always advise that we should as much as possible give our little money we save to Wealth Managers such as: FBN Mutual Fund, ARM Wealth Managers, AIICO Mutual Funds and a host of others, they understand the business of wealth creation and sustainability and they have been accredited and licensed by the CBN to carry out such business. if u ask me i prefer making my investment with these companies than to save up with one 'ýeye' pension fund administrator

How does ARM and co make money for you? I'll love to omow please

You know either two options are delightful.
But what if I told you! you could have both and not only both but an extra benefit with your savings and investment which is security.
How? You ask
Well knowledge they say indeed is power
I am a financial advisor for African Alliance insurance plc
A prestigious company offering investment, savings and security all at the same time on every of our plans.
To find out more do check out my post on nairaland by clicking the link below

https://www.nairaland.com/4390380/negligence-insurance

I am also available to any answer any questions you have or doubts within your mind
For further details I encourage you to Google my company and discover our unbeatable reputation we have built since operating in Nigeria for 58years

Our website is www.africanallianceplc.com
My email is femibolts@yahoo.com or call me on 08072169691
Thanks

Investment is better but the risk involved in investing is what you will always dread, saving on the other hand is also good when you save for a project; build house, buy a car or go on a vacation, or also for investment.

Great

winterfell007:
Investment is the better option. i will always advise that we should as much as possible give our little money we save to Wealth Managers such as: FBN Mutual Fund, ARM Wealth Managers, AIICO Mutual Funds and a host of others, they understand the business of wealth creation and sustainability and they have been accredited and licensed by the CBN to carry out such business. if u ask me i prefer making my investment with these companies than to save up with one 'ýeye' pension fund administrator

which is the best among them?