--- title: Why Invest Your Savings? 4 Key Reasons description: Money doesn’t grow on trees, but you can certainly grow money when you save & invest wisely. Here are 4 reasons Why Invest Your Savings? image: https://www.financialplanningindubai.com/hubfs/4%20reasons%20why%20you%20need%20to%20invest%20your%20savings-.jpg --- [![Financial_Planning_in_Dubai_logo](https://www.financialplanningindubai.com/hs-fs/hubfs/Financial%20Planning%20in%20Dubai%20Logo_9090-2.png?width=90&height=90&name=Financial%20Planning%20in%20Dubai%20Logo_9090-2.png "Financial_Planning_in_Dubai_logo")](https://www.financialplanningindubai.com/?hsLang=en-gb) - [Home](https://financialplanningindubai.com/) - [Blog](https://www.financialplanningindubai.com/blog) - [Services](https://www.financialplanningindubai.com/services) - [Islamic Investments & Takaful Plans](https://www.financialplanningindubai.com/blog/salama-hyat-plus-takaful-plan) - [Medical Insurance](https://www.financialplanningindubai.com/blog/topic/medical-insurance) - [Free Resources](https://www.financialplanningindubai.com/free-finanical-tools) - Tools - Calculators - [S&P 500 Investment Calculator](https://financialplanningindubai.com/sp-500-investment-calculator/) - [Life Insurance Calculator](https://www.financialplanningindubai.com/life-insurance-calculator) - [SIP Calculator](https://financialplanningindubai.com/sip-calculator/) - [Lumpsum investment calculator](https://www.financialplanningindubai.com/lump-sum-investment-calculator) - [Inflation Calculator](https://www.financialplanningindubai.com/inflation-calculator-uae) - [Net-Worth Calculator](https://www.financialplanningindubai.com/blog/free-personal-balance-sheet-template-networth-statement) - [The Best Budget Planner for Expats](https://www.financialplanningindubai.com/expat-budget-planner) [Book A Discovery Call](https://www.financialplanningindubai.com/meetings/damodhar?hsLang=en-gb) # Why Invest Your Savings? 4 Key Reasons ![Damodhar Mata](https://app.hubspot.com/settings/avatar/e63bc971ec29ebe6c012fd042c1a8215) [Damodhar Mata](https://www.financialplanningindubai.com/blog/author/money-mata-aka-damodhar-mata) 3 Jan 2019, 19:11:06 ###### [Investments](https://www.financialplanningindubai.com/blog/topic/investments) It is a well-known fact that money doesn’t grow on trees, but you can certainly grow money when you save and invest wisely. Many believe that saving and investing are the same, but in fact, they are entirely different. ## What is the difference between saving & investment? Saving involves setting aside a portion of your income for future needs and goals. Whereas Investing is putting your savings at work at work to make more money ![Differance between saving and investing.](https://www.financialplanningindubai.com/hs-fs/hubfs/Differance%20between%20saving%20and%20investing..gif?width=300&height=300&name=Differance%20between%20saving%20and%20investing..gif) While the objective of savings is to keep you from spending your income entirely, the purpose of an investment is to either generate additional revenue [(Passive income](https://www.financialplanningindubai.com/blog/2017/03/14/how-to-invest-for-passive-income-in-uae?hsLang=en-gb)) or appreciate in value(Capital Gains) or do both in some cases. - Annuity, Rent, dividends and interest from a bond are good examples of passive income. - Growth [stocks](https://www.financialplanningindubai.com/blog/shares-investment-uae?hsLang=en-gb)/[Mutual Funds](https://www.financialplanningindubai.com/market-linked-mutual-fund-invesments?hsLang=en-gb), Gold and land, are good examples of assets capable of providing capital gains. Now that we know what is investing and how it is different from savings, next we will analyze why you must invest? ### 4 reasons why you need to invest your savings? #### Reason 1: To improve your lifestyle An increase in income can undoubtedly improve your lifestyle, but this lifestyle largely depends on the continuity of such income. Also, it is not uncommon to see people with substantial incomes struggling to manage their expenses and debt. [Click here to learn from the stars on how to strike a balance. ](https://www.financialplanningindubai.com/blog/money-wisdom-from-stars?hsLang=en-gb) Investing your savings will create passive income, helping you improve your lifestyle. Whether it is purchasing a new house, buying a bigger car or the fancy vacation paying it through your investments is much more rewarding. A good lifestyle attained through passive income is more sustainable and fulfilling than the one built just on salary income. #### Reason 2: To preserve the purchasing power of your money This is perhaps a more significant reason to invest your savings because money kept idle will keep losing its spending power. Which means that every dirham you earn and save, will buy a smaller percentage of goods and services in the future. ![Invest to preserve the purchasing power of yout money](https://www.financialplanningindubai.com/hs-fs/hubfs/Impact%20of%20Inflation.png?width=740&height=528&name=Impact%20of%20Inflation.png) In the long term [Inflation](https://www.financialplanningindubai.com/blog/day-10-how-to-tame-the-inflation-monster?hsLang=en-gb) is the most potential financial risk, but often is not seen as a threat by many. It is negative compounding working against you day and night. Your money should be put to work to make sure that it earns a return higher than the prevailing inflation, i.e., Real Return. **For Eg:** If the current inflation is 4.00% then your money should earn more than 4.00% to keep up with the inflation. Usually, bank deposit rates on savings are lower or just equal to the inflation, hence investing your savings is necessary to sustain the purchasing power of your money. #### Reason 3: To achieve Financial Freedom Financial Freedom is when you don't have to rely on active employment/enterprise to maintain the lifestyle of your choice. It is when your assets are able to generate a sustainable income to meet your living expenses for a lifetime. Investing your savings makes Financial Freedom possible. It helps you build wealth enough to last for a lifetime and beyond. #### Reason 4: To create and leave a lasting legacy In the current world where people are finding it difficult to manage the day to day expenses, very few can afford to leave a lasting legacy for their family and society. Those few are the ones who understand the importance of regular savings and prudent investing. Investing your savings for the long-term helps you create wealth and a lasting legacy. #### Summary While we all may have distinct financial situations and different money motives, investing your savings can help you create long-term wealth and achieve your unique goals and needs. Want to invest your savings? Book a Discovery call to know how to invest in UAE. [Click here to book a Discovery Call](https://www.financialplanningindubai.com/meetings/damodhar?hsLang=en-gb) - [Best Investment in UAE for Short, Medium and Long term financial goals.](https://www.financialplanningindubai.com/blog/how-to-invest-in-uae?hsLang=en-gb) - [How to Invest your savings in UAE?](https://www.financialplanningindubai.com/blog/how-to-invest-your-savings-in-in-uae?hsLang=en-gb) - [5 Rules for Successful Investing](https://www.financialplanningindubai.com/blog/5-rules-for-successful-investing?hsLang=en-gb). - [How to Invest For Passive Income In UAE?](https://www.financialplanningindubai.com/blog/2017/03/14/how-to-invest-for-passive-income-in-uae?hsLang=en-gb) ![Damodhar Mata](https://app.hubspot.com/settings/avatar/e63bc971ec29ebe6c012fd042c1a8215) [Damodhar Mata](https://www.financialplanningindubai.com/blog/author/money-mata-aka-damodhar-mata) Author, Blogger & Independent Financial Advisor. My goal is to give you actionable tools for creating passive income and building wealth. More than 10,000 expats have already used my ideas to jumpstart their journey towards financial independence. Connect with me to start yours... Share this article on [mailto:?subject=Check%20out%20Why%20Invest%20Your%20Savings?%204%20Key%20Reasons%20&body=Check%20out%20https://www.financialplanningindubai.com/blog/4-reasons-why-you-need-to-invest-your-savings](mailto:?subject=Check%20out%20Why%20Invest%20Your%20Savings?%204%20Key%20Reasons%20&body=Check%20out%20https://www.financialplanningindubai.com/blog/4-reasons-why-you-need-to-invest-your-savings) ##### Read more - [The Real C-Suite – The Only Title That Matters 🏆](https://www.financialplanningindubai.com/blog/breadwinner?hsLang=en-gb) - [The Wealth Secret 99% of Investors Ignore – Will You?](https://www.financialplanningindubai.com/blog/the-iceberg-of-investing?hsLang=en-gb) - [From Risk to Reward? 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[Read More](https://www.financialplanningindubai.com/blog/day-21-basics-of-mutual-funds?hsLang=en-gb) [![How to choose the right investment in UAE?](https://www.financialplanningindubai.com/hs-fs/hubfs/Stock%20images/Businessman%20standing%20in%20front%20of%20opened%20doors%20and%20making%20decision.jpeg?width=300&name=Businessman%20standing%20in%20front%20of%20opened%20doors%20and%20making%20decision.jpeg)](https://www.financialplanningindubai.com/blog/how-to-choose-the-right-investment-in-uae?hsLang=en-gb) ###### [Investing in UAE](https://www.financialplanningindubai.com/blog/topic/investing-in-uae) ##### [How to choose the right investment in UAE?](https://www.financialplanningindubai.com/blog/how-to-choose-the-right-investment-in-uae?hsLang=en-gb) ### The following are the 5 steps to choose the right investment; 1. [Prioritize your Goals](https://www.financialplanningindubai.com/blog/how-to-choose-the-right-investment-in-uae#Step-1) 2. [Identify...](https://www.financialplanningindubai.com/blog/how-to-choose-the-right-investment-in-uae#Step-2) [Read More](https://www.financialplanningindubai.com/blog/how-to-choose-the-right-investment-in-uae?hsLang=en-gb) *Damodhar Mata | Your Trusted Financial Advisor in Dubai* ![Damodhar Mata-7-2](https://www.financialplanningindubai.com/hs-fs/hubfs/Damodhar%20Mata-7-2.png?width=119&height=119&name=Damodhar%20Mata-7-2.png) *I can help you grow wealth, gain passive income, and achieve your goals faster and with ease. * **Top Pages** - [Home page](https://www.financialplanningindubai.com) - [Best Life Insurance](https://www.financialplanningindubai.com/best-life-insurance-dubai) - [Best Investment Plan](https://www.financialplanningindubai.com/blog/how-to-invest-in-uae) - [Retirement Planning in the UAE](https://www.financialplanningindubai.com/retirement-planning-in-uae) - [FIRE Early Retirement Guide](https://www.financialplanningindubai.com/blog/early-retirement-in-uae-fire-guide) - [Best Child Education Plan](https://www.financialplanningindubai.com/childrens-education-planning) **Top Blog Posts** - [Financial Planner or Financial Advisor?](https://www.financialplanningindubai.com/blog/financial-planner-or-financial-advisor) - [How to find the Best Financial Advisor](https://www.financialplanningindubai.com/blog/best-financial-advisor-uae) - [Win With Money Challenge](https://www.financialplanningindubai.com/blog/30-days-win-with-money-challenge) - [FIRE guide for expats](https://www.financialplanningindubai.com/blog/early-retirement-in-uae-fire-guide) - [Pay Yourself First](https://www.financialplanningindubai.com/blog/how-expats-in-uae-can-grow-wealth-using-pay-yourself-first-strategy) - [Google Reviews](https://www.financialplanningindubai.com/testimonials-financial-advisor-in-dubai) **Other pages** - [About us](https://www.financialplanningindubai.com/about-us) - [Testimonials](https://www.financialplanningindubai.com/testimonials-financial-advisor-in-dubai) - [Services](https://www.financialplanningindubai.com/services) - [Contact us](https://www.financialplanningindubai.com/contact-us) --- © 2024 Financial Planning in Dubai. 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