Saving and investing

You're already comfortable with the importance of saving. Putting money into a bank account on a regular basis allows you to build up a cash reserve. You can use that reserve to pay for things that are outside your everyday budget, such as a family vacation or the down payment on a new car or a home of your own. Your savings can also provide an emergency fund that you can draw on to cover unexpected costs that can crop up — such as car repairs or having to miss work and losing income because of illness or injury.

Getting started

Some people — perhaps you included — may not be as comfortable about being investors as they are about being savers. That may be the case because many people aren't exactly sure where to start or how much money they need to begin. But as more and more people join the ranks of investors — by putting money into retirement accounts at work, for example — they're increasingly interested in how to make investing work for them.

Investing means buying things of value, sometimes called capital assets, because you expect them to:

• Become more valuable over time
• Provide a source of additional income
• Both increase in value and provide income

If your assets increase in value and you can sell them for a profit if you need the money, and if you have investment income in addition to what you earn, you can consider yourself a successful investor.