It has always been a wise idea to set aside some extra money for your future. However when we do set money aside, we have to decide what to actually do with it. Should you invest your money in the bank where you know it is safe? Or should you forget about the bank and put your money into something with a little bit more potential like the stock market?

This really depends. There are plenty of advantages of investing your money into something like the stock market and having it work for you.

1. Long Term Growth

The main advantage of investing into stocks is the long term potential it comes with. In general, if you invest your money in a diversified portfolio of quality stocks or an ETF then you will most likely make a nice return in the long run. If you follow smart stock tips and do your own research on companies then you can do even better.

2. Income

The second advantage of investing into the stock market is the extra income that it can bring. Dividend paying stocks for instance will pay you periodically throughout the year for each share of stock that you have. As your money grows and you buy more and more shares of stock it can turn into a nice income.

However simply saving your money has its advantages as well.

The first benefit is that you know you will not lose your money. If you invest your money into the stock market and then stocks crash you risk losing it all. But if you put your money into a bank and stocks crash you will still be ok.

So, what is better saving your money or investing it? Well, it can be nice to have a little of each.

Personally I like the idea of having a grand investment account that can grow into huge wealth over time. But, it is not something that you want to start pulling money out of tomorrow. Having a savings account for immediate emergencies and an investment account for long term goals seems like the best idea to me.