Very recently I read an article about one of the biggest fears that people have and that is the fear of not having enough savings at retirement and being without money at any stage of your life. This very common fear made me want to write about getting into the habit of starting to invest money early and never stopping to invest a portion of your monthly income towards the medium term or the future.
Investing is different than saving in that investing is putting your money away now for a term longer than 2/3 years in funds that earns you interest higher than inflation (inflation linked rates you will find in a bank account) so that you can use those funds at a much later stage in life (could be for buying a property or retiring etc).
Clients tend to think that to stash all their money in a bank account will be enough to protect their capital for future spending (longer than 3 years) but this is a mistake. You run the risk of the buying power of your money decreasing over time.
If you do not need all the current funds in your bank account and you already have a sizable emergency fund (3-6mths expenses) then you have to consider taking the next step and saving funds in investment vehicles geared for longer terms.
Now there are plenty of options out there and let me summarize the most important ones:
I left out a Retirement Annuity and other retirement investments on purpose as this will be tackled in a separate article next time
Hope this helped a bit and please let me know if you have any more questions on the investment vehicles above.