Saving vs investing vs Speculating

The greater the risk, the __________________ expected return 

• Lower

• Higher

What is the advantage of starting to invest at a young age?

• You have a shorter time horizon, so your money has more time to compound and grow.

• There is no risk when investing at a young age 

• There is no advantage to investing at an early age

• You have a longer time horizon, so your money has more time to compound and grow.

Why is investing a more powerful tool to build long-term wealth than saving?

• Investing is not a more powerful tool to build long-term wealth than saving

• Investing yields higher average rates of return, so your investments will earn less more than they would in a savings account.

• Investing yields lower average rates of return, so your investments will earn more than they would in a savings account.

• Investing yields higher average rates of return, so your investments will earn more than they would in a savings account.

The ease with which an asset, or security, can be converted into cash without losing value. 

• Return 

• Interest 

• Liquidity 

• Speculating 

It involves very little risk with an average annual return of 0%-2%

• Saving

• Investing 

• Speculating

It harnesses compound interest and compound returns and has moderate risk to grow your wealth faster.

• Saving

• Investing 

• Speculating

Assets include money market accounts, T-Bills, Certificate of Deposits (CD)

• Saving

• Investing 

• Speculating

Growth can be extremely high making such as returns greater than 50% or can lose all your money 

• Saving

• Investing 

• Speculating

Typically, has as average Annual Return of 6%-10%

• Saving

• Investing 

• Speculating

Assets examples include Cryptocurrency, Commodities, Options and Collectibles  

• Saving

• Investing 

• Speculating