Difference between reserves and investments

Boys and girls need to understand the difference between reserves and investments in order to make informed financial decisions. Reserves are funds that are set aside for the future. It is recommended to place them in a safe place, such as a bank or safe. Reserve funds are used to cover unexpected expenses or significant purchases. Their value is usually stable because their yields are low due to low interest rates.

Investments are the placement of funds into assets for the purpose of generating profit or expanding fixed assets. They are used to achieve financial goals such as buying a home or getting an education. Investing involves the risk of loss due to market fluctuations, but the risk can be reduced by spreading your investments among different assets. It is important to understand that reserves provide short-term financial stability, while investments help achieve long-term goals.