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Saving is a function of total income minus total expenses, is one approach towards savings. Another approach and perhaps a progressive approach can be seen as saving is not a residual function, rather savings are first derived from total income and then expenses become residuals. Thus, it moves from Income-Expenses=Savings to Income-Savings=Expenses equation. The equation of savings depends upon the approach or attitude of an individual. So is the case with investments also. Proportion of savings converted into investments again depends upon various factors like returns expected, risk perceived, availability of timely information about investments etc.