Hi! I’m New Here

More than likely you have started somewhere new. School, work, a place of worship, a book club, an exercise class … we all have experienced the anxiety, excitement, worry, concern, thrill, overwhelm, and so many other emotions that come along with it.

Sometimes we have a friend, an acquaintance, a colleague, a family member, or even just a friendly guide who offers a tour and helps us acclimate to the new environment. We have the opportunity to ask questions, find out where to go if we need help, meet some of the other students, co-workers, group members, anyone else involved in our new activity.

Other times, we feel alone. Perhaps we are alone. Maybe we have moved to a new city or state or country … and we have yet to meet companions on our journey.

Wherever you find yourself in the world of investing, you are not alone. There are investment groups, professional advisors, television shows, podcasts, websites … and sometimes it feels like too much. Sometimes it just feels like there is so much out there that we end up completely disoriented and running away rather than digging in and finding our way.

If you are feeling that way, take this as an opportunity to step back and breathe. Take one small step. Come up with one question you have and start there. If you aren’t sure, here is one basic one:

What is the difference between saving and investing?

Think about it for a moment … are they the same? Or are there simply similarities or overlap between the two concepts?

Let’s look at some definitions.

Saving, in financial terms, is basically income that is not spent. It is holding back money from being spent immediately in order to be used at a later date.

Investing is taking money and putting it into something we hope will grow in value over time, such as stocks, bonds, mutual funds, crypto, or any number of other products.

Think back to being children. Saving is more like putting your pennies into a piggy bank. Investing is taking your pennies and buying ingredients to make lemonade and set up a lemonade stand. By putting the money into your piggy bank, you can be confident you have your pennies there, and as you add more pennies you will end up with a whole dollar, and then hopefully another dollar, and so on … However, by taking your pennies and buying lemons, sugar, cups, a poster board, and investing the time and effort into setting up your stand, you hope that you will end up with more than the pennies you would have otherwise set aside. There is the chance though that someone else makes better lemonade across the street. Or that it rains on the day that you were going to set up your stand. You have taken that risk of having no pennies in the hope that you will make more pennies.

Some of us prefer to know that we have those pennies in our piggy banks; we feel comfortable in knowing our pennies are there, safe and sound. However, there is risk with that too, but we will begin to dig into that next time. The goal here is to understand a little bit better the basics of what we will be discussing as we move forward.

Until next time,

~Jacqui O.