Savings and Investing

Savings and

Investing

Economics

Open Ended

What do you think is the difference between saving and investing?

Savings Vs. Investing

�What is the difference??

�Savings: —Income that is not spent on consumption but is put aside.

�Investing:—To engage in any activity in which money is put at risk in the
hope of making a profit.

�What are your goals?

�Budgeting is key!!!

Multiple Choice

Income that is not spent on consumption but is put aside.

• Saving

• Investing

Multiple Choice

To engage in any activity in which money is put at risk in the hope of making a profit.

• Saving

• Investing

Savings

Savings Account

�Pay Yourself First

� From each paycheck or allowance, deposit a set amount or
percentage into your savings account before spending money on
anything else.

� At the end of the day, put all your change in a “savings” container.
Once a month, deposit the money in a savings account.

� Whenever you get unexpected money, put a portion of it into
savings.

Open Ended

What is one way you can save your money?

Certificate of Deposit

� Interest-bearing accounts offered by banks and savings and

loans, which are federally insured. CDs are like savings
accounts but pay higher interest rates in exchange for tying
up money for a set amount of time, which can be a period
of months or up to five years. If the money is removed
before the CD matures, the account holder will be subject
to a financial penalty.

� https://www.nerdwallet.com/blog/banking/cd-certificate-o

f-deposit/

Multiple Choice

What is a Certificate of Deposit (CD)?

• It is an old technology that plays music

• It is a savings account

• It is like a savings account but you cannot take out money for a set amount of time

• It is like a bond but like not though

Investing

Bonds

�Bonds are issued by governments
and corporations when they want to
raise money. By buying a bond,
you're giving the issuer a loan, and
they agree to pay you back the face
value of the loan on a specific date,
and to pay you
periodic interest payments along the
way, usually twice a year

Multiple Choice

Bond is a way for the government to raise money

• True

• False

Mutual Funds

� Mutual funds are investment strategies that allow you to

pool your money together with other investors to
purchase a collection of stocks, bonds, or other
securities that might be difficult to recreate on your own.
This is often referred to as a portfolio.

�https://www.thebalance.com/mutual-funds-101-356319

Stocks

�https://www.youtube.com/watch?v=7EUbrFLef7M

�U.S. stocks have consistently earned more than bonds over the long term,
despite regular ups and downs in the market.

Retirement Plans

�401(k): a savings and investing plan offered by employers that gives
employees a tax break on money they set aside for retirement.

�403b: a tax-deferred retirement savings account offered to employees of
nonprofit or 501 (c)(3) organizations, including public schools, hospitals,
museums, churches and charitable organizations.

�IRA (Individual Retirement Account):

� Traditional IRA offers a tax deduction for the tax year in which the

contribution was made.

� Roth IRA gives investors the chance to invest money after taxes and then

take the contributions and earnings out tax-free in retirement.

� Nondeductible IRA is generally the only alternative for very high earners

who otherwise don’t qualify for the other types.

Multiple Choice

Which one is NOT a retirement plan?

• 401(k)

• IRA Roth

• Stocks

• 401b