That is entirely dependent on your risk tolerance, financial needs, and the time frame in which you need to access the funds. Investing has the potential to yield substantially higher returns than savings accounts, but it does so at the expense of risk, especially over shorter time periods.
If you’re putting money aside for a short-term purpose and will need the money soon, you’re usually better off keeping it in a savings account. On the other hand, if your aims are longer-term, you’ll usually discover that investing produces better outcomes.
Some questions that you would need to ask yourself if you cant decide on whether to save or to invest are;
Do you have enough cash on hand to pay three to six months’ worth of fixed expenses? Start saving if you haven’t already.
Do you have any additional short-term goals that need these funds (such as travel plans)? If this is the case, you should begin saving right away.
Do you think you’ll be able to retire at the age you want? Start investing if you haven’t already.
Do you realize the dangers of investing this money for a long-term goal like retirement? Are you willing to wait to access your money in order to benefit from compounding? If this is the case, you should start investing.
Do you like how you’ve divided your monthly savings and investments so far? What areas do you feel you’re falling short on?
While this list isn’t perfect, it’s a good place to start when it comes to visualizing the future you want, planning how to get there, and budgeting for the costs. Working with a financial advisor at Vita Wealth Management will help you assess your present financial situation, future financial goals, and the exact method for achieving them.
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Vita Wealth Management LLC, Dubai