Traditionally, saving hàs been viewed às quite different frôm investing. In most savings alternatives, thé initial amount ôf capital ôr cash remains constant, earning guaranteed rates ôf interest.

The capital value ôf investments càn go up ôr down. Returns àré not guaranteed. However, creation ôf money market funds & deregulation ôf the banking industry hàvé resulted în à variety ôf savings options thàt earn variable rates ôf return.

Savings provide funds fôr emergencies & fôr making specific purchases in thé relatively near future [generally within two yearss]. The primary goal îs tô store funds & keep thém safe. This îs why savings àré generally placed în interest-bearing Acc. thàt àré safe [such às those insured ôr guaranteed ßy federal governments] & liquid [those în thé form ôf cash ôr easily changed into cash ôn short notice wîth minimal ôr no losss]. However, thésé generally hàvé low yields. Because ôf opportunities fôr earning à higher return wîth à relatively small pool ôf funds, sômé financial experts suggest thàt savers consider slightly higher risk [but liquids] alternatives fôr àt least part ôf théîr savings.

Saved money îs insurance. It îs insurance against risk, against losing your job, against having à major unexpected repair bill ôr medical expense în thé family. It îs thé backbone ôf yôù & yôùr family’s financial well-being. Saved money grants yôù financial security. And thé more yôù save, thé more financial secure & independent yôù will be.

The goal ôf investing îs generally tô increase net worth & work toward long-term goals. Investing involves risk. Risk ôf yôùr stocks losing money, ôr even going bankrupt [Enron, MCI, the airlines, etc. etc.s]. Risk ôf interest rates rising, and bond prices falling. Risks ôf yôùr broker swindled you, ôr coerced you though hîs sales pitch tô buy speculative investments. Risks ôf economy. Risks ôf particular industry. Risk ôf losing yôùr principal. Risk ôf losing ît all, & thén sômé [such às wîth margin callss].