Saving Versus Investing
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What are the differences between saving and investing?
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Why is cash not considered king in finance?
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Welcome to the Australian Finance Podcast, a podcast for people who want to learn more about their personal finances and get the most from their money. This series is hosted by Kate Campbell from HowToMoney and Owen Raskovich from Rask Finance.
The Australian Finance Podcast is provided for educational purposes only. The information is general in nature and does not take into account your needs, goals or objectives. What that means is the information does not apply to you specifically.
What is an Authorised Deposit Taking Institution (ADI)?
So consider getting the advice of a licensed and trusted professional before acting on the information.
Hi Owen, welcome back to the Australian Finance Podcast.
Thanks Kate, thanks for having me. What are we talking about in today's episode?
So today we wanted to talk about the differences between saving and investing, investing myths and why cash isn't king.
Why cash isn't king? That sounds like a very bold statement. Yes. But I like the sound of this. We're starting to get the first few episodes were like the veggies.
How can investing help build long-term wealth?
Now we're getting to like the meat. We're getting into the good stuff.
Yeah. So now you smashed out your debt. You've got your budget sorted out. You've got your emergency fund. And now you're ready to think about investing.
Yeah. We're talking about the things that you can do with your money rather than the things like, you know, trying to save it all. Yeah.
What are common myths about investing?
So why don't we kick on? Why are saving and investing not the same thing?
Yeah, so generally savings account, which is probably what you've got your emergency fund in right now, you're just earning interest from the bank, whatever they're paying you, maybe that's 2%, maybe 3%. So you're just earning money from that and that's generally because the bank's lending out your money to home loans and things like that. So they're paying you an interest to sort of say, thank you for letting us use your money. But then when it comes to investing, you're actually putting your capital at risk in majority of cases, I believe. And you're hoping to get a return that's generally greater than bank interest, which is sort of a phrase you want to go, oh, is it better than bank interest?
Yeah, okay. That's an interesting way to put it. And I think, yeah, you're right.
Is investing the same as gambling?
The way I distinguish between the two is risk. Yeah. So if you're putting your money in a savings account, we'll get to the types of institutions that can provide government-guaranteed savings account in Australia. And then there's virtually no risk. But on the other side, we have risk when it comes to investing. There's the risk that you might lose your money. There's the risk that it might go down and stay down or go up and never go up past a certain point.
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Chapters
8 chapters
1
What are the differences between saving and investing?
0:00–0:57
2
Why is cash not considered king in finance?
0:57–1:56
3
What is an Authorised Deposit Taking Institution (ADI)?
1:56–2:27
4
How can investing help build long-term wealth?
2:27–2:43
5
What are common myths about investing?
2:43–3:34
6
Is investing the same as gambling?
3:34–4:12
7
How much money do you need to start investing?
4:12–5:01
8
What small steps can you take to start investing today?
5:01–22:56
Speakers
3 identifiedMore from Australian Finance Podcast
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Sounds like good money advice... But is it?