Saving vs Investment

Question 1

What does saving mean?

Answer 1

Placing money in a secure place so that it grows

in value and can be used in the future

Question 2

What does Investment mean?

Answer 2

Speculative commitment to a business venture in the hope that it generates a financial reward in the future.

Question 3

Are there risks to saving?

If so what are they?

Answer 3

NO but potentially
• Low or zero risk as money saved is
guaranteed to be available in the future
• Inflation can reduce the spending power of
money saved

Question 4

Are there risks to investing?

If so what are they?

Answer 4

YES
• Investments can go wrong and all or some of
the value may be lost
• No guarantee of a return

Question 5

The rewards of saving?

Answer 5

• Interest payments

* Financial security/peace of mind

Question 6

The rewards of investing?

Answer 6

If successful, there is potential for a high financial return (significantly higher than could be earned in interest)
• Can be exciting! Some people will invest in shares, antiques, art or foreign currencies, for example, in the hope of high returns