How do you know when to save and when to invest?

8 tips for saving and investing:

• How much money do you need to get started?

• When should you start?

Most of us are aware that investing your money means you’ll end up with more than if you keep it in your piggy bank. But it can be surprising to see the difference between saving and putting your money to work – by which we mean investing in even low-risk, low-return products.

Women in particular – if you consider wage inequality, a tendency to work part-time, and their longer life expectancy – can’t really “afford” not to invest.

If you put 10,000 francs into a savings account for 20 years, at an interest rate of 0.25%, you’ll end up with 10,512 francs. But if you invest the same amount at, for example, 4.0%, you’ll accumulate 21,911 francs over the same period. You can use this saving calculator (supplied by moneyland.ch) to calculate the results for all your possible plans, even monthly deposits. (Don’t forget to deduct the costs of the investment product from your results!)

Saving is when you simply put money aside for a certain period. You might have a specific purpose in mind, like a trip or a big purchase. But with investing, you temporarily turn your money into stocks, bonds, gold, or real estate, with the aim of increasing the amount you own over the long term. Deciding which is the better approach depends on your personal goals and opportunities. It also depends on how much you’re willing to take risks – without at least some risk, you can’t get a return.

A representative study of 1,500 people in Switzerland, conducted by Migros Bank, showed that 92% of young people (aged 18 to 29) regularly put money aside, along with 93% of 30 to 55-year-olds. The same young people said they didn’t invest their money, as they weren’t familiar with alternatives to savings accounts (52%) and they believed they had too few assets (48%).

It always pays to make your money work harder. Compound interest means that the earlier you start, the better. But it can still be worthwhile investing at any age.

it’s always a great idea to invest any money your children might have – as we say in the trade, children have a very long “investment horizon.” Despite special conditions and little or no fees, with interest rates being so low at the moment, there’s little point relying on a children’s saving account.

This amount depends on your income, your outgoings and personal situation, your goals – but also your willingness to take risks. One way to work out your investment target is to start with your current budget, then roughly define your goals: what do you want to have in one year? three years? five or more years? Then see approximately how much money you will need to invest to achieve that.

You could invest any amount that you won’t need for the next five years. Or you could make regular monthly investments in a fund savings plan or ETF savings plan, instead a basic savings account. This is also possible with small amounts. But check the fees for these funds before you get started, especially with ETFs. Depending on which online broker or bank is administering them, there may be additional costs to make a deposit, transaction (brokerage) costs for buying and selling , and even additional taxes to pay. It’s good to compare a few providers to see what’s available.

9 tips for investing

Women often ask us about savings and investments. Common questions are: whether you should invest if you have debt, or how much cash reserve is really useful in an emergency. The answer is that the exact figures are always very personal, but determining a few facts about your own finances means you can think realistically, which will help you to determine your own strategy.