13d • General discussion
Saving vs Investing (in plain English)
"I'm saving right now to buy a house."
"I'm saving up right now to ________"
I hear this all the time. And every time I think: what if they were INVESTING too? They'd get there so much faster!!
So let's break it down together.
The difference:
Saving = money you don't want to lose (safety, access it anytime)Investing = money you want to grow (compound interest working for you)
Most people think it's one or the other. But I think it's actually both.
Here's how they work together:
Step 1: Build $1,000 emergency fund fast (covers small surprises)
Step 2: While building toward 3-6 months expenses, start investing small ($20-50/month)
Step 3: Once emergency fund is solid, shift focus to investing more and saving less.
Real life example - Charlie:
Makes $4,000/month, monthly expenses $3,200, has $800 extra.
Her 12-month plan:
- Months 1-6: $600 savings, $200 investing
- Months 7-12: $300 savings, $500 investing
By Month 12:
- Emergency fund: $9,000 (3-6 months worth of expenses met! Shift focus.)
- Invested: $5,400 (worth ~$5,650 with returns)
If she keeps going:
- Year 5: $36,600 invested
- Year 20: $295,000 invested
That $200-500/month turned into almost $300k. That's the power of doing both.
Common mistakes let's avoid:
- Investing before you have any emergency savings (risky - one surprise and you're pulling money out of investments at a loss)
- Only saving and never investing (inflation eats your purchasing power - money loses value sitting still)
- Keeping 5 years of expenses in savings (too safe - missing growth opportunity)
The bottom line:
Both are important. The order matters.
Safety first (emergency fund) → Then growth (investing) → Maintain both forever.
In this community, we'll cover:
- Exactly how much should stay safe
- When you're ready to shift to investing
- How to start with index funds (VOO, VTI explained)
- How to automate both so it happens without thinking
- How to adjust as your income grows
No action required today. Just understanding where you are and where you're going.
As a small community, I hope that everyone here can share, continue to stay engaged and take actions towards your financial goals:
Which stage are you in right now?
- Building emergency fund (saving mode)
- Have emergency fund, starting to invest
- Emergency fund solid, investing regularly
- Not sure where to start
Drop your number below 👇
Also, if theres a part of this that you want to learn more about, please share and we'll get workshops going for them!
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Saving vs Investing (in plain English)
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