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Savings Vs Investments: Which Is Better? Any Difference?

The longtime debate stands between Savings and Investment, which is better! Before you come into the post and scream “Investments”, I sincerely want you to read and digest the post.

Savings, as written in this post doesn’t mean the regular bank savings account. Please refer to the previous post for more details.

You must have come across this quote that compares savings and investment before “Investments make you rich, while savings make you poor”. This is absolutely false and would never be true. Financial illiteracy is the reason why many people keep losing money in the financial market and
blame the devil for such action.

This post would help you decide whether you are ripe to create investments, or you should build up your portfolio with a good discipline savings culture.

Difference between Savings and Investment

Is there any difference between these Savings and investment? The answer is yes, and I will explain below.

“Saving is an Investment, but an investment isn’t saving.”

The above statement has been proven correct by financial experts, and I will show you an example below.

According to TheBalance, “Savings helps you make money while investing MIGHT help you build wealth”

Putting the above statement in another way, when you invest, you are more likely to lose your money and become poor than when you save.


The basic difference between Savings and Investment is just the Profit margin and risk factor.

Savings = Zero Risk investments + Low-profit margin.

Investing = High Risk + High-Profit margin.

This simply means that Savings can be called investments, but investments cannot be called savings.

A friend of mine had 600k Naira in his account and invested about 400k in setting up a poultry farm. After 4 months, all the bird suffered from a particular disease and died. He was left with just 200k to plan his life again.

A woman has 1 million Naira in her account and invested about 900k in a particular share she was advised to buy. The Share lost its value and she came back home empty-handed.

“What a way to spend her hard earned money”

There are also success stories of people who invested and got out successfully, but in investing, it is nothing but pure luck and a little bit of financial literacy.

A particular popular firm in Lagos known for it rich financial background has been declared bankrupted and taken over by the appropriate body. Shareholders and stakeholders have gotten their fingers burnt, which means Goodbye.

Things to do before you decide to Invest as a Starter

1. Have robust savings account far from your reach

A lot of people contacted me after my last post on how they could invest. After I talked to them about the need to save money before investing, I became a prophet of doom to them. They forget that the fastest way to lose money or gain money is to invest. This is a big difference between Savings and Investment

As a low salary earner, a working class person with a family with no major savings, young people building their lives, saving for a while will give you the leverage to invest.

"Investment portfolios will never stop to cease, but saving requires discipline and focus."


It is impossible to find an investment with so much upside potential without excessive risks to it. Imagine looking for an investment portfolio with an interest margin of 40%, yet you aren’t willing to lose money. It doesn’t work that way.

If you don’t have reserve savings account with more than 500k Naira, then you shouldn’t think of investing in any major portfolio.

You can’t have an account balance of 100k (Home and abroad), and you are thinking to start a business with all of it. Have you calculated your risk factor? Maybe you should just employ me.

Consider your Debts, Cash Flow, and Liabilities.

A married man with 2 kids already has lots of liabilities to consider. The wife, home, kids, school fees, car, and etc are enough debts to consider already.


There are several savings investments to invest in, and I will be willing to share in my next post. You can just subscribe and I will inform you when it is out. The basic truth is that you should consider Savings and Investment.

The key to saving like I discussed in my last post is avoiding the banks (Where you won’t touch your money)

Save for a while before you invest

According to Warren Buffet (the chief saver), he said “Investments might make you rich, but savings will never make you poor).

One advice I give my clients is that before they decide to invest, they must show me their savings balance.

While you decide to save, you should consider a long-term plan that would enable you to accumulate your money and have a wonderful reserve account.

Avoid High interest and High-Risk Portfolios as a Learner

The brokers won’t tell you this (sorry I am bursting their bubble). Stockbrokers and other financial brokers survive through the money you invest.

As a learner, avoid investment portfolios that promise unrealistic ROIs. They will sucker you in and unload dogshit on you.

I have lost thousands of Naira on several high-risk investments, and I have made millions from high-risk investments too. So I know exactly what it feels like.

If you have worked as a working class person with an average salary of 45k for above 3 years without a savings balance of 800k Naira. What you need is financial discipline and not investments for now.

Accumulate money with savings, and build wealth with investments. That is the relationship between savings and investment.

Recommended Book to read: “Richest Man in Babylon” by Napoleon Hill

Just remember that when it comes to taking tough financial decisions, you might grow cold feet. Spending money is actually sweet!

Just visit the blog by using the link, and subscribe for more exciting posts. Thanks to all those who bought me beer the last time, I hope to get more. Smiles… bye!

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