The other day someone in the comments mentioned he’s planning to propose in 3 months and he’s wondering if he should invest the money he plans to spend on the ring until then.

FIRST OF ALL, my brother, buying a ring takes some time! Make sure you talk to your would-be fiancé about what she wants and START SHOPPING. Some jewelers are gonna want 8-12 weeks lead time!

SECOND OF ALL, oh my god NO you should not invest that money. Investing for 3 months is gambling. And no, you should not gamble your engagement ring money.

Here’s the deal. Investing over long periods of time WORKS. This is because investing in the companies of the world is how you direct all the growth and profits of those companies back to yourself. Over time, this always works. But over a SHORT period of time there’s some volatility baked into those stock prices because speculators are guessing what’s going to happen over the next day, week, or month. A decade from now your investments will be much higher. You can count on that. But three months from now it’s almost a coin flip.

So if you’re deciding between saving and investing, it basically comes down to “when do you plan to spend this money”? If it’s within a few years, don’t risk the short term volatility of the stock market. Keep it safe in a high-yield savings account and collect your interest. If we’re talking 4+ years, the balance shifts and volatility becomes less of an issue and the higher rate of return means more over all those years.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy