Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed...
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![Page 1: Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649ef75503460f94c0ab08/html5/thumbnails/1.jpg)
Difference Between Saving & Investing
Difference Between Saving & Investing
SavingsSavingsSavingsSavings
• Short-to-Mid Term needs (< 5 years)
• Guaranteed Return
• Low Return
• Primarily a “parking space” for money
• Short-to-Mid Term needs (< 5 years)
• Guaranteed Return
• Low Return
• Primarily a “parking space” for money
InvestingInvestingInvestingInvesting
• Mid-to-Long Term needs (> 5 years)
• Greater Volatility and No Guarantees
• Large Potential Return
• Primarily for meeting long-term financial
goals
• Mid-to-Long Term needs (> 5 years)
• Greater Volatility and No Guarantees
• Large Potential Return
• Primarily for meeting long-term financial
goals
![Page 2: Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649ef75503460f94c0ab08/html5/thumbnails/2.jpg)
“I don’t want risk!”“I don’t want risk!”
“My money is safe in the bank, but I could lose money with investing!Why take the chance?
Two hidden risks of not investing
• The risk that low interest rates from a savings account won’t provide you with enough money
• The risk of inflation
![Page 3: Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649ef75503460f94c0ab08/html5/thumbnails/3.jpg)
$100.00 saved in your piggy bankin 1987…
Because inflation steals your money's value.
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
…is worth only $53.23in 2007
Why take the risks of investing?
![Page 4: Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649ef75503460f94c0ab08/html5/thumbnails/4.jpg)
Risk vs. RewardRisk vs. Reward
![Page 5: Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649ef75503460f94c0ab08/html5/thumbnails/5.jpg)
The Stock Market:An Introduction
The Stock Market:An Introduction
![Page 6: Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649ef75503460f94c0ab08/html5/thumbnails/6.jpg)
Risk vs. RewardRisk vs. Reward
![Page 7: Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649ef75503460f94c0ab08/html5/thumbnails/7.jpg)
Dow Jones Industrial AverageDow Jones Industrial Average
3M DuPont JPMorgan Chase
Alcoa ExxonMobil McDonald's
Altria Group General Electric Merck
American Express General Motors Microsoft
American International Group
Hewlett-Packard Pfizer
AT&T Home Depot Procter & Gamble
Boeing Honeywell United Technologies Corporation
Caterpillar Intel Verizon Communications
Citigroup IBM Wal-Mart
Coca-Cola Johnson & Johnson
Walt Disney
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Annual Stock Market Returns (1926-2006)
-60.00%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
1926 1936 1946 1956 1966 1976 1986 1996 2006