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There is a difference between saving and investing
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Because we are often guilty of using the words saving and investing interchangeably, we want to take a time out and make it crystal clear that they are actually very different.

You save for the present.  Investing is about the future.

The job of your savings is to be there when you need it--not to get a sexy return. 

For a goal that is 10 or more years in the future, it is reasonable to invest in stocks and bonds.

Both saving and investing involve risk.

Inflation is the primary risk to a saver.  $1 today will not purchase the same amount of goods and services 10 years in the future.  Inflation erodes your purchasing power over time.

The risk involved in investing depends on what you own.

 

<NEXT:  The Basics of Bonds>

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