How to save and invest money

Saving money vs investing 

What is investing?

What is saving?

How much should I save and invest?

How to start saving and investing 

Effective budgeting can help you free up funds that are tied up in unnecessary expenses.

You can set aside some funds in current or savings accounts for emergencies. You may keep their wealth in demand or time deposits. At the same time, investment planning can also come into place.

Investment planning is the process of managing your financial resources to achieve growth and build wealth over time through strategic investments. Investing involves placing your funds into assets such as stocks, bonds, mutual funds or property, which may potentially generate higher returns.

Every investment has its own risk. Your returns are not guaranteed.

Investing may be suitable for you if you:

Saving is putting aside some of your money for the future. You might be saving for something specific, like buying a new car or going for a holiday. Or building a savings pot to cover any emergencies or unexpected costs you might face.

You can build your savings in one-off or regular payments. And if you choose to save using an easy-access savings account, you can get back what you put in, plus the interest you've earned, whenever you want it.

Putting money into savings may be suitable for you if you:

It's a good idea to try and save at least 10% a portion of your monthly income. You should also consider building an emergency fund of around 3 to 6 months of your monthly spending. Everyone is different – your budget will determine how much you can save.

Investing is a personal choice. What you decide to do and how much you invest will depend on your retirement planning. If you can afford it, you might want to invest around 10-15% of your income[@article-invest-imoney]. If you're earning RM6,500 a month, that's RM650 set aside for investing. 

Understanding your risk appetite is important.

Investment planning involves learning about different investment products that fit your risk tolerance and purpose of diversification to help you make informed investment decisions. With a better understanding of risk and return, you can structure your portfolio to align with your short, medium, and long-term financial goals.

For many people the answer is a blend of the two. For example, to build an emergency fund to meet unexpected costs, an easily-accessible savings account would seem a sensible option. However, to achieve long-term financial goals, investments could generate greater return.