Investing vs. Saving

What’s the difference? Investing uses money to potentially create more money; saving generally stores money away. Whether a person prefers to invest or to save often depends on his or her tolerance for risk.

Many think of saving as the “safe” way to go. But investing carries its own range of safe to risky choices — with bonds and money market accounts at the more conservative end and equities (stocks) at the more risky end. In addition to risk tolerance, the decision to save or to invest also depends upon other factors, including your time horizon and goals.