These terms sometimes get confused, but the main difference between saving and investing is the age of that money. With saving, money is stashed away somewhere safe for use in not much more than a few years. Investments, on the other hand, are larger amounts that are used to grow wealth over a much longer period.

Usually, people will SAVE money to build up an emergency fund and for specific short-term goals, like a holiday or a new car. This money is often kept in a low risk, low return bank account where it can be easily accessed when needed. You can also save money now to invest later once the amount has grown.

Once you’ve paid off your debts and established an emergency reserve, your finances will probably be in good shape. Now is the time for you to put some of your hard-earned money to work by INVESTING for long-term goals, like retirement. This takes time – years or even decades – and investments do come with some risk, but also the potential for substantially higher growth. Wise investors will spread that risk by investments in different countries through a diversified portfolio. Low-cost, low- to mid-risk exchange traded funds (ETFs) are one popular way to achieve this.