Saving vs. Investing

May 2015

Investing typically involves forgoing the use of your money today with the expec­tation that wise choices (which involve significant long-term return potential, along with some uncertainty and risk) will lead to sufficiently greater after-tax purchasing power in the future to compensate for the wait.  In contrast, saving typically involves storing your money safely, with the expectation of preserving your pre-tax dollars, though not necessarily your after-tax purchasing power.  Very simply put, investing is primarily about growing your purchasing power, while saving is more about maintaining your dollars (or losing purchasing power at a modest rate).