In the age of fiat currency, the distinct concepts of saving and investing have become conflated and confused.
Saving is producing more than you consume and then setting it the difference aside.
Investing is allocating capital to a productive business to create more wealth. Investing has more risk—and potential reward—than saving.
Today, however, what most people think of as saving is actually investing.
That’s because most people take the excess of their production over consumption and put it into the stock or bond market.
Most people understand that it’s not optimal to simply hold fiat currency, which the central banks continuously debase. So they put their money into other assets, primarily bonds and stocks.