You’ve probably heard people throw around phrases like “you need to save” or “start investing early”. But what do they actually mean?
Let’s be honest, sometimes it feels like you’re expected to be a finance expert just to figure out what to do with your own money. Before I started my journey in finance, I used to wonder too: should I keep my money safe in a savings account or try investing it somewhere it can grow? And what’s the real difference anyway?
If you’ve ever felt stuck deciding between saving and investing, this is for you. I’ll break it all down in simple terms so you can confidently choose what works for you or even do both.
What is Saving?
Saving means putting money aside for short-term needs or emergencies. It’s low risk, and you can easily access the money when you need it.
When you save, you’re not trying to grow the money fast; you’re just keeping it safe. And if you want your money to do a bit more while sitting safely, Earn by Trove lets you save and earn up to 16% per annum. You still get easy access to your funds, but with better returns than the average savings account.
What is Investing?
Investing is about putting your money to work so it grows over time. You can invest in things like stocks, ETFs, and mutual funds or any other financial asset that may go up and down in value but can grow your money significantly in the long run.
The key difference between saving and investing is that investing carries some risk but also comes with the potential for higher returns.
With the Trove app, you can start investing with as little as ₦1,000 in Nigerian and international stocks. You don’t have to be an expert; just be willing to learn and start small.
Savings vs Investing: The Key Differences
Understanding the difference between savings and investing helps you decide what’s right based on your financial goals.
| Feature | Saving | Investing |
| Risk | Very low | Varies (can be higher) |
| Returns | Modest (up to 16% with Trove) | Higher potential over time |
| Accessibility | Easy to withdraw anytime | May take time to sell assets |
| Purpose | Short-term needs, emergencies | Long-term goals like wealth building |
| Examples | Earn by Trove, Savings apps | Stocks, ETFs, real estate |
The difference between saving and investing comes down to time, risk, and reward. Saving protects your money. Investing helps it grow.
Should I Save or Invest?
The truth is, you need both.
Start with saving. Build an emergency fund that covers at least 3 to 6 months of your expenses. That way, if life happens, you’re covered.
Then move to investing. Once your emergency fund is solid, start putting your money into things that grow. Even small amounts invested consistently can add up over time.
So, instead of choosing between savings vs. investing, create a plan that includes both.
Common Mistakes to Avoid
When people think about savings vs. investing, they sometimes fall into one of these traps:
- Saving everything without ever investing
- Investing without having savings for emergencies
- Keeping money in zero-interest accounts that lose value over time
You can avoid these mistakes by understanding the difference between saving and investing and creating a strategy that includes both.
FAQs
Is saving better than investing?
Saving is safer, but investing helps your money grow faster. You need a mix of both to build real wealth.
Can You Save and Invest in One App?
Yes. That’s where Trove comes in. You don’t need two different platforms for saving and investing. Use Earn by Trove to save and earn up to 16% per annum. You can invest in local and international stocks, ETFs, and more using the main platform.
Everything is in one app. It’s seamless and built for people like you who are ready to take control of their money.
Can I invest with ₦5,000?
Yes. Trove lets you start with small amounts and grow as you learn.
How do I know when to save or invest?
Save for short-term needs or emergencies. Invest for long-term goals.
How can I balance savings and investing?
Try a simple approach: save a portion of your income each month (especially for emergencies), and invest the rest based on your goals.
Read Also: Common Stock Investing Mistakes to Avoid
Conclusion
Savings is like having a safety net. Investing is how you build the ladder to reach your money goals. There’s no need to pick sides in the savings vs. investing debate. The smart move is doing both intentionally.
Use Earn by Trove to save with returns of up to 16% per annum, and invest on the same app to grow your wealth long-term. You’re not just keeping money; you’re making it work for you.
