It depends on your personal circumstances. If you have money, capital, and you won't need it in the short term, then it's better to invest your money because technically, capital needs to stay in motion. Otherwise, it stops being capital.

If your money isn't generating more income, then it's passive, and what you really need is to turn it into an asset.

A financial asset is essentially a piece of paper where, as the buyer, you have the right to receive income, and the seller has the obligation to pay. In other words, it allows you to receive money now or in the future, with varying levels of security.

By the end of this post, you'll be able to discover whether saving or investing is better for you today. We'll explain the difference between the two, when it's better to do each, what an investment is, what to consider before investing, how to do it, and its benefits.

Let's dive in!

What's the difference between saving and investing?

The difference between saving and investing is simple: when you save, your money is just stored, and you can withdraw it whenever you need it.

When you invest your savings, the money "works" to generate returns, so you'll have more money than you initially had.

We invite you to read an interview with Ramit Sethi, the entrepreneur and author of the bestseller "I Will Teach You to Be Rich," where he tells BBC News - Mundo that saving isn't the best way to accumulate wealth.

What is an investment?

An investment is when you buy assets, such as company shares, with the goal of them increasing in value over time. An investment grows your savings because, in the end, you'll have more than you started with. Gains can be short or long-term.

To clarify what buying shares means, we can compare it to buying a plant: when you buy it, you need to care for it so it grows and eventually bears fruit.

What is a share?

A share is part of the equity of a corporation, the asset of a company, and it's what you invest in. Keep in mind that its profitability is variable since it depends on the company's business results.

When you're an investor and buy part of a company or venture, you become a shareholder of that company. You'll earn money through the profits generated by that business.

We could dive deeper into topics like why people buy shares, how to buy shares from Latin America, and how profits work, but the main goal of this post is to help you decide whether it's better to save or invest your money.

When is it better to save?

It's better to save when your goal is short-term, and you'll need the money soon. In this case, that money is simply there for you, accumulating and waiting to be used.

So, if you're not absolutely sure you won't need that money soon, it would be wise just to save and not invest, because when you save, you can withdraw the money whenever you need it.

When is it better to invest?

It's better to invest when you have a certain amount of savings, and you want to increase its value. If you're sure you won't need that money in the short term, it's better to invest it.

If you know that the money won't be used or needed for a long time, it's very convenient to invest it because that money will "work" for you without you having to do much.

Let's break it down...

How and where to invest your money?

The best option for investing is in the stock market, as that's where you'll find a wide variety of stocks to buy and sell. You don't need a lot of money to do so, just make sure that the money you're investing won't be needed for a certain period.

The easiest way to invest in the stock market is by creating an account on Hapi, for example, which has no commissions or minimums. Once you've made your account and deposited the amount you want, you can search for the company you want to invest in on the platform, enter the number of shares you want, and you're done.

Hapi is a broker-dealer domiciled and registered in the United States but accepts clients from most Latin American countries. In summary, anyone can invest in the U.S. stock market. Hapi is a registered broker-dealer agent that allows people to sign up and buy and sell the shares they want.

When your money reaches the expected value, you can simply transfer it to your bank and get your money back along with the profits from the investment. We know everything has its benefits and risks, so let's dive a bit deeper into that.

What to consider when investing?

There are certain factors to keep in mind before investing. You need to understand the concepts clearly and consider a few things. Here are the 3 main factors to consider in an investment:

1. Expected return
2. Investment risk: you need to consider the volatility of the investment's value—essentially, the more risk, the more likely it is to either decrease or increase.
3. Time horizon: this refers to the fact that the money will be invested, and you won't be able to access it. You need to know if you want to invest for the short or long term.

Benefits of investing

1. You maintain the value of your capital, meaning your money won't remain stagnant over time.
2. It promotes the growth of your savings, as it provides long-term gains.
3. It generates steady secondary income, which is always welcome at the end of the month.
4. If you're saving for the future, such as for retirement, that's one of the benefits of investing.
5. If you invest with Hapi, you can buy and sell stocks in the U.S. stock market with no minimum amount. There are over 5,000 stocks, and it's commission-free.