Investing vs. Savings

I believe there is a popular misconception about saving and investing. The misconception is furthered by the fact the most people are encouraged to own stocks and bonds in their retirement accounts. Saving is a safe passive activity that involves practically no risk. Either you are buying bonds issued by the United States government or buying certificates of deposits which are guaranteed by the United States government. Investing is allocating capital for a possible return on the initial capital. Banks and financial institutions connect both parties so capital markets can function. However, an investor is rewarded for taking risk with their capital, while savers are rewarded for deferring compensation to put their money away for a guaranteed return. The best investment one can make is in themselves and the best savings vehicle in the last 40 years was US T-bonds which have outperformed the S&P 500.