Savings & Investment

Different ways to save and invest money

Saving and Investing

Saving keeps money safe for future use (bank accounts, stokvels). Investing puts money to work so it grows (shares, property, retirement funds). The difference: saving is safe but grows slowly; investing can grow faster but has risk. Both are important for financial security.

Example

Saving vs Investing

Saving (low risk, low return): • Bank savings account: 5% per year • Stokvel: community saving group • Fixed deposit: locked away for higher interest Investing (higher risk, higher potential return): • Shares (JSE): own a piece of a company • Property: buy a house that grows in value • Unit trusts: professionals invest your money R100/month from age 18 at 10% = R580 000 by age 60!

Note

Remember

The earlier you start saving/investing, the more time compound interest has to grow your money. In SA, stokvels are a powerful community saving tradition — over 800 000 stokvel groups exist! Never invest money you might need soon, and never invest in schemes that promise guaranteed high returns (scams).

Key Vocabulary

SavingKeeping money safely for future use

InvestingUsing money to buy something that will grow in value

StokvelA SA community savings group where members contribute regularly

Compound interestEarning interest on your interest (money grows faster over time)

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