Unless being a broke gamer is a lifestyle choice, it tends to be a pain.
The thing is, it doesn’t have to be that way.
Being a gamer means you already have a mind for strategy and planning ahead, which will serve you well in making your own real-life money.
Wondering where to start?
No worries. Just keep on reading to know all about the top three things about investing vs saving that’ll put you on the right financial track.
1. Investing vs Saving: So What’s the Difference?
They might sound like they’re the same thing, but they’re not. As a matter of fact, for a wholesome financial strategy, you should be doing both.
So let’s start with the basics, shall we?
In the simplest of terms, investment is something (like an item, or an asset) that is acquired to generate some sort of income or appreciation.
Investments can be a lot of things; like bonds, stocks, mutual funds, real estate, gold, or derivatives.
For example, if you bought an apartment with the intention to lease it, the monthly rent payments you receive is your return on investment.
A thing to note about investment is the fact that it is of higher risk than savings because they promise higher returns.
Savings is the leftover money that you have after spending your disposable income (DPI). It’s what you decide to hide away every month out of your income.
It’s the little money you put aside for buying that amazing game that your friends have been raving on and on about on Steam, and it’s that money cushion that you’ll use for any kind of emergency.
The idea behind savings is not to generate income (unlike investing), but to not lose the actual value of your money as time goes by.
2. How to Let Your Savings Save You
Anyone can save, but to have solid savings without losing out on other investment opportunities is a bit tricky.
So start with tracking your savings by putting a deadline or reminders in place, and make sure there is a specific goal for that savings account.
A good rule of thumb is understanding the two types of savings that you should have: emergency savings, and goal-oriented savings.
Your emergency savings can be accumulated through a simple savings bank account, and you should keep putting money into it until it covers all your personal expenses that span six months.
It includes everything from personal expenses to insurance costs, utility bills, and loan payments.
So if you lose your job or any other extenuating circumstances happen where you lose your main source of income, your savings can save you until you can get back on your feet without an insane amount of emotional and mental pressure.
If you have any specific goal that will cost you a large chunk of cash in five years or less, then go the savings route, not the investment one.
There are a couple of options here, like getting a CD from a bank, where you’re toeing the line between savings and investing, but you’re actually getting the best of both worlds: higher return and low risk.
3. Investing for the Future
Same as with savings, investing does have a couple of golden rules so that you can avoid unnecessary risks, and gain the highest benefits possible.
First, the earlier you invest the better.
We know it sounds simple, but it truly does make a difference.
Second, when you get to save money while playing, that’s you hitting two birds with one stone.
Third, you need to make sure that you understand what type of investment vehicles are you going for and what are their limitations.
Fourth, go for the no-brainer solid funds, like a 401(k) if it’s offered by your employer.
There are other plans for specific purposes like an education savings account (ESA) or 529 plan if you have children, which allow withdrawals when your kid goes to college.
There are so many investment instruments out there, so make sure you shop well before you buy.
Ready to Make Some Money?
Now that you know all about investing vs saving, and the top three tips for saving and investing money well, you’re good to go!
And if you have any questions about how to make money as easily as gaming, then make sure you contact us and we’ll put you on the right track.