Savings vs. Investing. Savings Investing is the purchase of assets with the goal of increasing future income. Savings is the portion of current income.

Slides:

Advertisements

Similar presentations

Learning Objective # 1 Recognize relationships among financial documents and money management activities.

Advertisements

Saving Basics Savings is the portion of current income not spent on consumption. Savings accounts provide an easily accessible place for people to store.

UNIT FOUR Savings and Investments: Your Money at Work

Chapter 4 Return and Risks.

Investment Basics A Guide to Your Investment Options Brian Doughney, CFP® Wealth Management Senior Manager.

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 11 The Time Value of Money.

Chapter 10 Saving for the Future.

How to make your money grow!.  Savings Account ◦ Completely safe ◦ High liquidity ◦ Low rate of return  Certificate of Deposit (CD) ◦ Completely safe.

Unit 3, Lesson 7 Investment Concepts AOF Financial Services Copyright © 2007–2012 National Academy Foundation. All rights reserved.

Investment, the Capital Market, and the Wealth of Nations

Summary The Investment Setting Why do individuals invest ? What is an investment ? How do we measure the rate of return on an investment ? How do investors.

Financial Statements for a Sole Proprietorship Why It’s Important Financial statements provide the essential financial information necessary for sound.

Who Wants to Become a Millionaire?. Savings vs. Investing Savings:  Putting $ aside (mattress, bank account, jar, piggy bank etc.) to reach a particular.

Savings and Investing How to make your money grow….

Personal Finance Chapter 1 & 3 Study Guide

A Saving TO BUILD WEALTH Welcome to MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP Make money work for YOU © 2011.

Section 1: Should I save or invest.  Differentiate between the various types of saving and investing accounts based on safety, interest rates, and annual.

Saving & Investing Achieving Financial Success. What does it mean? Saving  Putting money aside for future use Investing  Using money so that it earns.

{ Savings & Invested Test Review. { Interest The percentage rate paid on money you have invested/saved…

Lesson 10-2 Principles of Saving and Investing LEARNING GOALS: -DISCUSS THE CONCEPT OF RISK VERSUS RETURN. -LIST AND EXPLAIN THE TYPES OF RISK THAT ARE.

Financial Goals.

Why It’s Important Savings accounts allow you to put money aside and help make your money grow.

Personal Financial Literacy Lesson 2 Review 1. Which of the following is an example of investing? a. Putting money into a piggy bank at home. b. Saving.

Lecture No.1 By M Fahad Siddiqi Lecture (Finance) IBMS.

 Saving is income not spent.  Saving also includes reducing spending, such as recurring costs.  Savings can include a relatively low-risk investment.

Investing 101 Having Your Money Work For YOU. Saving vs. Investing List 2 ways you can save on one post-it and 2 ways you can invest on the other. Stick.

Investment You will not be able to work forever and saving for retirement becomes a must = financial goals must be made for financial security. Investing.

Unit 6: Financial Planning Driving Question: Why is it important that we invest in ourselves?

1 FINC3131 Business Finance Chapter 5: Time Value of Money: The Basic Concepts.

CHAPTER 5 BOND PRICES AND RISKS. Copyright© 2003 John Wiley and Sons, Inc. Time Value of Money A dollar today is worth more than a dollar in the future.

PERSONAL FINANCE MAKING PERSONAL FINANCIAL DECISIONS.

Introduction to Saving. © Family Economics & Financial Education – Revised November 2004 – Saving Unit – Introduction to Savings Funded by a grant from.

Saving and Investing BBI2O. Saving and Investing Consumers can use any money left over from purchasing goods and services toward savings or investing.

 Goals:  Explain the relationship between risk and return when investing.  Describe how to evaluate the level of risk you should accept when investing.

Financial Statements for a Sole Proprietorship Making Accounting Relevant Financial statements provide information to owners and managers about how the.

© 2012 Regents of the University of Minnesota. All rights reserved.

Introduction to Saving. © Family Economics & Financial Education – Revised November 2004 – Saving Unit – Introduction to Savings Funded by a grant from.

Introduction to Saving. © Family Economics & Financial Education – Revised November 2004 – Saving Unit – Introduction to Savings Funded by a grant from.

Investments There are many different reasons to invest: University/college House Kids’ future Life Insurance (Cash Surrender) Retirement Travel & saving.

Personal and Financial Planning Chapter 1. Section 1.1 Objectives  Section 1.1 Define personal financial planning Name the six steps of financial planning.

Bell Work, Wed. 5/13 O Where is Shell going to start drilling for oil? O Who created the first Presidential Library? O What technology are firefighters.

Section 3The Balance Sheet What You’ll Learn  The purpose of a balance sheet.  How to prepare a balance sheet.  How to analyze information on financial.

Investing: Making Money Work For You October 24, 2009.

 Start with a specific measurable goal ◦ Save $ to open an IRA  Pay Yourself First ◦ Set up a direct deposit to a personal club account. ◦ Open.

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Good Morning! Objective: Define the purpose of Decision.

4/29/2008 Saving versus Investing. Saving Money stored away for a short term goal; usually in a savings account at a bank. This account has SMALL interest.

The Balance Sheet. What is a Balance Sheet? A financial statement that shows the company’s assets, liabilities, and net worth (also known as equity) on.

Chapter 1 Introduction to Savings Personal Finance Mr. Brown.

CHAPTER 4 BOND PRICES, BOND YIELDS, AND INTEREST RATE RISK.

+ Introduction to valuation: The time value of money CH 5.

FINANCIAL STATEMENTS FOR A SOLE PROPRIETORSHIP Chapter 9.

Unit Four Savings & Investments Pages

Personal Financial Planning.  Establishing a plan for how you spend your money can help you make wise purchases. What factors help you decide what to.

ECONOMIC ACTIVITIES OF CONSUMERS EARNING  Gaining money by working, owning a business, or receiving investment returns.  Money gained from.

Chapter 32 Saving and Investing Introduction to Business Spring 2005.

Introduction to Saving & Investing Family Economics & Financial Education Take Charge of Your Finances.

Understanding the Economics of One Unit  One way to analyze profitability is to look at how much profit the business makes every time a customer buys.

Choose to Save Advanced Level G1 © Take Charge Today – August 2013– Choose to Save– Slide 2 Funded by a grant from Take Charge America, Inc. to.

Reflection # 20 “You can always make more money, but you can’t make more time.” What does this mean to you? Explain… Bell Quiz Day 6 Stock Market.

Why Are You Investing? There are two types of investing: personal & economic. This chapter uses the word invest as a quick way to refer to personal investing—which.

Real Estate Principles, 11th Edition

Choosing to Save Essentials

Introduction to Saving

PF 8.01 (Savings & Investing)

Savings vs. Investing.

Investing and Saving Standard 1: Discuss how saving contributes to financial well-being. Standard 3: Evaluate investment alternatives. Standard 4: Describe.

Day 1 – Total and Annual Return

Chapter 5.1 Vocab.

“Take Charge of Your Finances” Advanced Level

May 17 & 18 Objectives Reminder Today’s Agenda

Presentation transcript:

Savings vs. Investing

Savings Investing is the purchase of assets with the goal of increasing future income. Savings is the portion of current income not spent on consumption. Investments

Risk, Return, and Liquidity  Risk The chance that the value of an investment will decrease. The chance that the value of an investment will decrease.  Return The profit or yield from an investment. The profit or yield from an investment.  Liquidity The ability of an investment to be converted into cash quickly without loss of value. The ability of an investment to be converted into cash quickly without loss of value.

Risk, Return, and Liquidity  Savings Low risk Low risk Low return Low return High liquidity High liquidity  Investments High risk High return Low liquidity

Inflation, Savings and Investments Today, a large soft drink at your favorite fast-food place costs $1.00. You buy the soft drink but also decide to save some money for the future as well. So you put a dollar in your savings account, where it earns 5%. NEFE

Inflation, Savings and Investments One year later, the dollar in your saving account is worth $1.05. You take the money out and visit your favorite convenience store, hoping to buy another delicious beverage. Unfortunately, drinks now cost $1.10. NEFE

Inflation, Savings and Investments The point? Inflation can work against your money. You need to learn to invest wisely, follow the rate of inflation, and make sure your investment rates are higher than those of inflation.

Time Value of Money  The time value of money refers to the fact that a dollar in hand today is worth more than a dollar promised at some future time.

Future Value  Refers to the amount of money to which an investment will grow over a finite period of time at a given interest rate.  Put another way, future value is the cash value of an investment at a particular time in the future.

“You can always make more money, but you can’t make more time.”  Respond to this statement on your guided notes and then discuss it with a partner. How does it relate to future value?

Time Value of Money Picture from NEFE

Risk and Return  What is the relationship between risk and return?

Which financial product is appropriate for the following situations?  Saving for a senior trip  Saving for a down payment on a house  Saving for retirement

NEFE Teacher Guide

Sample Student Work