I am back to mess with your head.

There are times when I am anal when it comes to precision in our choice of words – we mean what we say; we say what we mean. (Of course it helps if we have a wider grasp of vocabulary)

However, there are times we should not let the trickery of words fool us. Nor get trapped by words by insisting to split hairs when it comes to semantics…

Today, I shall illuminate the difference between investing and saving.


When we invest, we tend to think in terms of windfall. Its the emotion of greed. We try not to admit it, but deep down we know it is.

We also know there is a possibility of loss. Like starting a business, completely loss of our capital is real. Again, conscious or unconscious, we acknowledge this fact.

The synonyms for investing are: gamble, speculate, punt, wager, bet, venture.


When we save, we are not expecting fireworks, thunder, or lighting. It like planting a acorn and hope one day it will turn into the giant oak.

We don’t expect to lose our capital. Planting is not like going into the forest to hunt for game. Underneath the veneer of conservatism is the emotion of fear.

The synonyms for saving are: preserving, conserving, keeping, safeguarding, maintenance.

Various Instruments of Torture

  1. CPF

Voluntary contribution of CPF is saving. So is transferring of CPF OA to SA.

But the moment we invest our CPF funds under CPIS, its investing. Hence the majority as in 3/4 of CPF members who utilised their CPIS underperformed the low CPF hurdle of 2.5%…

  1. Bonds and Debts

Buying short term duration triple A rated bonds and holding them till maturity is saving. You won’t lose the capital.

Buying Greek bonds is investing. I don’t care long or short term duration!

Buying bond funds is investing. Capital loss is real. (Too complicated to explain here)

Buying unrated corporate bonds is investing. That’s why they are known as junk bonds.

Lending money in peer-to-peer platforms is investing. Don’t cry default when you are getting 18% yield as compensation. Or course the borrower is glad as if he would to borrow from credit card companies with no collateral down, he would be charged 25%! Make a guess where the missing 7% went?

  1. Life Insurance

Noticed I put a “Life” in front? That’s precision. Insurance without the Life in front is totally another ball game altogether…

Wholelife and endowment policies are saving. You will recover the capital intact. The projected “return” is not returns as in investing returns. They are more like savings or fixed deposit interest rates.

However, there’s a big “but”. Wholelife you must hold till 20 years and beyond, and for endowment till maturity. Its no different from bonds or voluntary contributions to CPF. The price for capital protection is you must accept your money to be “locked-up”. No free lunch!

Investment-linked policy is investing. Albeit one of the dumbest kind. You not only pay management fees to the investment portion, you also pay the sales commission so your agent can take that holiday to Europe. And you thought buying unit trusts from banks with a 5% sales charge was dumb!

Term policy? This one is unique. Its neither saving nor investing. It’s like those other sort of insurance without the Life in front.

For eg, if you bought travel insurance and nothing happened during the trip, the premium you bought that travel insurance for is now money down the toilet. This is like Dirty Harry, “Do you feel lucky? Well, do you!?”

  1. Equities and Properties

Of course its investing lah!

Although some “investors” thought by calling themselves “Passive Investors” they would be accorded immunity. I not investing what? I passive! See? I’m just “saving” money every month into this ETF…

  1. Gold, Silver, and Bitcoins

Its investing.

Those who bought gold at USD $1,800 per ounce as an inflation hedge is finding out the hard way what the synonyms for investing are… Not saving right?

OK, this is just the foreplay.

Women readers would appreciate it.

Part 2 will come shortly.

Singapore Man of Leisure (welcome to my blog; just google it!)