Many people are faced with the decision of whether to be a saver or an investor. A savour should expect to receive a risk premium for their lack of investment, while an investor should expect less of a risk premium. This post will take you through how this works and why it is important to understand in order to make your best financial decisions!
A savour should expect a risk premium because they are not investing. An investor, on the other hand, does have more of an understanding and experience with investments so it is expected that they would receive less of a risk premium for their investment choice.
Do I want to be a savour or an investor? What type of environment am I in? Am I able/willing to take risks? How much disposable income does I currently have available for savings versus investing? How often can my investable assets earn interest? Is there any need for me as an individual or in society?