Personal financial strategies: to save money or to invest?

Surely you’ve heard the expression - “money like water.” This implies that they are running out all the time. You do not like this situation, but you do not know how to influence it? Let’s get together.

In fact, the comparison of money with the water is very appropriate - the money is constantly in motion, they “flow”.
We have sources of money (income) and there are expenses. We cannot spend more money than comes to us from our sources (including credit). And if we find ourselves in a situation where we are obliged to pay more than we have, it is called “bankruptcy”.
It is believed that the fear of bankruptcy is one of six “primitive” subconscious fear of a man. Perhaps, therefore, people consciously or unconsciously try to reduce costs through savings, by spending less money than they receives, and thus create a “stability margin”.
If revenues exceed expenditures, we have generated a surplus of funds. There are several strategies to use this surplus. Let’s examine each of them.
The amount for a «black day”
If a person has some extra money, he puts some fixed amount «for a black day.” The remaining money is spent as income.
In an emergency (that «black day”), the reserve is mobilized to eliminate the gaps, and then, at the first opportunity is created again.
Saves money
Unlike the previous strategy, deferred amount periodically replenished. Options for storage of money are different: under the pillow, in a sock, in a bank.
The last method of storage is a “transition” to the following strategy - investing. But it is not investing because percent that bank gives is rarely covers inflation and rising prices.
Investing.
Investment -is the creation of additional sources of income in the future, the capacity of these sources tends to increase with time. The habit of investing regularly - one of the surest ways to gain financial independence.
In confirmation of this can cause the results of calculation. Investing for $ 300 a month under 20% per annum for 20 years, you build up equity in the 1 000 000 $. If you do not believe it - take a calculator and count them.
Summarize:
The most effective (in terms of financial results) of the three considered strategies is investing. There are three key aspects - the regularity of investments, long-termness and interest capitalization.