Best Investment Consultants in Ahmedabad Investments a smart move as compared to Savings Savings refers to that part of disposable income, which is not used in consumption, i.e. whatever is remained in the hands of a person, after paying all the expenses. For example, Monthly income of Mr. A is Rs. 50000 and his monthly household and other expenses amount to Rs. 30000 so ultimate Savings of Mr. A, money remained in his hands, amounts to Rs. 20000 in cashor Bank savings account. Savings are defined as the part of consumer’s disposable income which is not used for current consumption, rather kept aside for future use. There are several ways through which a person can save money like, accumulating it in the form of cash holdings, or depositing it into the savings account. The stepping stone of wealth formation is savings, which is decided by a person’s level of income. The higher the income of a person, the higher is his capacity to save, because the rise in income increases the propensity to save and decreases the propensity to consume. It can also be said that it is not a person’s ability to save that encourages him to save money, but the willingness to save forces him to do so. The willingness depends on some factors like his concern or financial background, etc. On the other end, Investment is the act of investing the saved money into financial products, with a view of earning profits. It indicates the increase in capital stock. For example, Monthly income of Mr. A is Rs. 50000 and his monthly household and other expenses amount to Rs. 30000 so Mr. A invests remaining Rs. 20000 in Mutual funds. Thus, Rs. 20000 is Investment and another income source for him. For an enterprise/entity, investment implies the production of new capital goods, such as plant and machinery or change in inventories. The process of investing money saved is known as an Investment. It could be anything, i.e. money, time, efforts or other resources that you exchange to earn returns in future. When you purchase an asset with the hope that it will grow and give good returns in the coming years, it is an investment. Present consumption should be foregone to obtain higher returns later. The ultimate purpose that works behind the investment is the creation of wealth which can be in the form of appreciation in capital, interest earnings, dividend income, rental income. Investment can be made in different investment vehicles like stocks, bonds, mutual funds, commodities, options, currency, deposit account or any other securities or assets. As investment always comes with a risk of losing money, but it is also true that you can reap more money with the same investment vehicle. It has a productive nature; that helps in the economic growth of the country. Money if invested in mutual funds, will be invested in different industries and can help industries grow and ultimately Indian economy will grow and with good Industry returns, the person investing money will also grow. Savings = Money is Idle/not invested Investments = Money Makes more Money by generating returns A smart way to generate Passive Income Understand why Investing is the only way to grow Savings.