1. Savings and Investments: Your Money at Work
Financial Literacy
Mrs. Dayley
Use with Unit 4 of NEFE manual.

2. Mrs. Dayley – Financial Literacy
Savings vs
Investments
Savings is usually money you set aside for short-term goals.
Money in savings may be invested later.
Money in savings is very safe.
Earns a small amount of money
Can pull money out at any time.
Investment – When you invest, you set money aside for future income, benefit, or profit to meet long term goals.
No guarantee that your money will grow or increase.
Loss is possible and it takes time to recover.
LONG TERM
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Mrs. Dayley – Financial Literacy

3. Mrs. Dayley – Financial Literacy
Value of Time
As you listen to the poem, list five ways that time is valuable to you.
Example: To realize the value of a Friday morning, ask a student who spend five hours in restitution.
Read students the poem on page 127 of Seven Habits of Highly Effective Teens, by Sean Covey.
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Mrs. Dayley – Financial Literacy

4. Mrs. Dayley – Financial Literacy
Time Value of Money
The relationship between time, money, and the rate of return (interest), and their effect on earnings growth.
See example on page 46 of Student Guide
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Mrs. Dayley – Financial Literacy

5. Mrs. Dayley – Financial Literacy
Time is
MONEY
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Mrs. Dayley – Financial Literacy

6. Mrs. Dayley – Financial Literacy
Compounding
The idea of earning interest on interest.
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Mrs. Dayley – Financial Literacy

7. Mrs. Dayley – Financial Literacy
Earned Interest
The payment you receive for allowing a financial institution or corporation to use your money.
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Mrs. Dayley – Financial Literacy

8. Mrs. Dayley – Financial Literacy
Rate of
Interest
Time
Money
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Mrs. Dayley – Financial Literacy

9. Assignment 4.1 The Power of Compounding
Page 47
Student Guide

10. Mrs. Dayley – Financial Literacy
Rule of 72
Tells you how long it takes your money to double in value.
Divide 72 by interest rate to determine number of years to double.
Divide 72 by years to determine rate needed to double your money in a given time period.
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Mrs. Dayley – Financial Literacy

11. Try It! Apply the Rule of 72 to find the time or rate.
Assume you can earn 6% on your money. How long will it take $100 to grow to $200?
72 ÷ 6% interest =
12 years
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Mrs. Dayley – Financial Literacy

12. Try It! Apply the Rule of 72 to find the time or rate.
If you have $200 today and need $400 in eight years, what interest rate do you need to earn?
72 ÷ 8 years =
9% Interest
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Mrs. Dayley – Financial Literacy

13. See Figure 4.1 The Advantage of Starting Early
The Impact of Time on the Value of Money

14. Read page 50 in Student Guide
Assignment 4.2
The Impact of Higher Returns on Savings and Investments

15. Read text on page 51 in Student Guide
Study Figure 4.3
On page 51 of Student Guide

16. Key Terms Record on listening log.
Diversification (52)
Inflation (52)
Taxes (53)
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Mrs. Dayley – Financial Literacy

17. Income Investments (Lenders)
Savings Accounts
U.S. Savings Bonds
Certificates of Deposits (CD)
Money Market Accounts
Corporate and Government Bonds
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Mrs. Dayley – Financial Literacy

18. Growth Investments (Owners)
Stocks
Capital Gain
Real Estate
Collectibles
Mutual Funds
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19. Action Steps “Get Started with Your Savings Habit Now!”
Complete Action Steps
Page 58

20. A computer is like a brain because of the way it networks information.
Analogy
Drawing comparisons in order to show similarities
A computer is like a brain because of the way it networks information.

21. Mrs. Dayley – Financial Literacy
Investing Analogies
Divide into pairs
Complete the following analogy:
“Investing is like ______________.”
Develop at least three supporting reasons for the comparison.
Create a visual representation of the analogy. List reasons on poster.
Present analogy to the class.
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Mrs. Dayley – Financial Literacy

22. Mrs. Dayley – Financial Literacy
THE END
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