Category Archives for Money
Spending versus Investing: There is a difference
If you want to have more money or wealth in the future, then you need to know all you can about spending and investing. At a level, spending and investing is the same thing because they both require that something leaves your hand which can be cash. However, when you’re investing, you get back returns in the future. It could be financial returns or assets.
Investment is tailored towards getting something of financial quality in the future. It is spending as well, but you’re spending with the intention of getting something back in return. If it is money you’re spending, it leaves your hand, but it doesn’t leave your life. I hope you understand.
When you’re spending, you are only doing things for the present. Whatever returns or goods and services you acquire would be useful immediately. Examples include holiday purchases or shopping, dinners, events, and all our wonderful experiences when we take a trip fall under spending. While luxury items such as cars, smartphones, computers, renting an apartment are all things that reduce in value with use, they are the things that are necessary, and we use it daily till it is no longer considered good or it is totally unusable.
When you think of how you can gain more financially, always consider your choice carefully. What would you go for? Goods that depreciate or something that adds to your financial gain and brings in return in the future? If you think about this properly and make the right decisions, it may be painful not having what you want immediately, but you’ll be happier later.
Even when you’re between the rock and the deep blue sea in your decisions, you know you should invest more and spend less and not the other way round. That’s a basic idea of the difference between spending and investing.
Let me paint a picture for you: it’s your birthday, and you want to have a nice time. You have one thousand dollars ($1000). You can decide to go shopping (spending) or you can use the money to pay for your college fund or save it up for a business you want to start (investing).
Remember that spending is for today while investing is for the tomorrow. One who eats bread is spending but the one who plants wheat and processes it to make bread is investing and would make money from it.
Investing is really about increasing the value of your life. It isn’t only about cash. Another thing you can spend or invest is your time. If you decide to play games on your phone or watch videos on Facebook or Instagram instead of reading a book or adding to your knowledge and skill by watching a DIY video, then you only spent your time you didn’t invest it.
It is not only individuals who can invest. Companies and the government can also choose to invest. If the government decides to provide infrastructure for the citizens and it maintains this infrastructure, then the government is investing as well. It is important to develop an investment mindset. Your life and future depends on it.
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