Presentation on theme: "Income, Outgo, and Investment. National Income Money does grow on trees! Since 1990 the national income has nearly doubled. Definition: total rent, wages,"— Presentation transcript:
Income, Outgo, and Investment
National Income Money does grow on trees! Since 1990 the national income has nearly doubled. Definition: total rent, wages, interest, and profits paid to employees in a year.
What to do with leftover money (if there is any) Disposable income Save it or spend it? The more money you have the more you save. As a nation, on average, we only save about 3% of what we make. Yikes! We have a low “propensity” to save. That means we have a tendency to spend, not save our disposable income.
Investment If, starting at the age of 20, you start saving $1,000 per year at an average return rate of about 4% by the time you reach the retirement age of 65 you will have over $1 million for your retirement.
The bottom line People either spend or save disposable income. Mostly in the U.S., we spend. The propensity to save is DOWN. The more money you make the more likely you are to save some—duh. It’s good to invest =). Not just for you, but for the economy too! That rhymes. I hope you enjoyed the pictures.