Confused About Data Element Actions XDM Object and Variable?

Hi,

I'm confused, in Adobe AEP data collection, what's the difference between the data element type of XDM Object and Variable? As far as I can tell, when you use XDM Object in a data element, the selected fields will automatically be updated when a send event happens? If I create a data element with the "variable" data element type, that means that I have to have a rule before the send event where I am selecting the event and properties to update? Is this correct? So, from what I'm understanding, XDM Object will update the XDM object every time, regardless of the event and the update variable is used to update the XDM object only on specific events? 

Thanks!