Many of us save money. Some invest. But have we thought about how to combine these options to support our life goals – whether it is buying your own home, securing a peaceful retirement or simply achieving peace of mind?
Securing your future is not just about saving or investing – it is more like taking care of a garden, where different tools serve different purposes, and success depends on timing, consistency, and mindful choices. There are more ways to grow your money than it might seem at first glance: some are better suited for short-term plans, while others support long-term dreams. That is why it is worth looking at your financial plan as a whole – not focusing on a single solution, but instead seeking a balanced combination that best supports your goals and life situation.
Three strategies for growing your money – which combination works for you?
There is not just one correct way to grow your money – it all depends on what you want to achieve with your money, how long you are willing to set it aside, and how much risk you are ready to take. In general, approaches to growing your money can be divided into three categories: saving, saving with investing, and investing.
Saving is suited for those who want to keep their money safe and grow it slowly, but surely. This is a good choice for goals like a vacation fund, unexpected expenses or a down payment on a home. Saved money grows calmly, with low risk, providing stability and peace of mind for people. It is often the first step for those who are just starting to manage their finances more consciously.
Saving and investing is an ideal middle ground for those who have a higher risk appetite but do not want to actively make investment decisions. This approach combines the security of saving with the potential of investing, where professionals manage investments on your behalf. It is suitable for building long-term security (for example, for retirement or children’s education) and is a good way to diversify risks while steadily growing your money.
Investing, on the other hand, is for those who want to grow their money more ambitiously and are ready for greater fluctuations. Here, you choose which assets to invest in, which means more responsibility and a need to tolerate short-term losses, but over the long term, investing may offer the greatest growth.
For these approaches, there is no need to choose just one – often, the most sensible solution is to use them together, depending on your goals and time horizons.
Assess your risk appetite based on your goals
A good goal is clear, specific, time-bound, measurable, and meaningful to you.
Short-term goals might include saving for a vacation fund or a new computer. Long-term goals could be a home down payment, saving for your children’s education or building a peace-of-mind fund.
For short-term goals, the best option is usually to save separately from your everyday settlements. For example, using a demand deposit or term deposit account. This way, the money grows steadily, and the risks are low, which creates stability and peace of mind.
For those who want to grow their money more ambitiously and are ready for larger fluctuations, investing might be the right choice. Broadly speaking, there are two options – you can trust investment decisions to experts or make decisions yourself.
Take a look at our updated website and read about the following:
- An overview of different money-growing opportunities
- Inspiration from real stories and product recommendations
- Clear financial terms, in case any terms are still unclear
- Practical tips and tests to help you assess your financial behaviour
- Useful materials to help you invest in your own knowledge
Investment services are provided by AS LHV Pank. Learn more about the terms and risks at lhv.ee and ask our expert for advice. This article is for information only and should not be considered as investment analysis or advice.
