NEW
Font size
Worksheets7.1 Why Should I Invest?
Total questions: 13
Worksheet time: 18mins
Which is NOT a difference between saving and investing?
Saving is short term, investing is long term
Saving is low-risk, investing is high-risk
Saving does not pay interest, investing does pay interest
Saving does not beat inflation over the long run, investing usually does
Which is NOT an example of investing?
Cash
Stocks
Bonds
Mutual Funds
Property
What would be a typical average annual return for a savings account?
10%
0.05%
1.5%
2%
What would be a typical average annual return for an investing account?
10%
0.05%
1.5%
2%
Which of the following assets have the lowest risk?
Cash
Bonds
U.S. Stocks
U.S. Micro Cap Stocks
Which of the following assets have the highest risk?
Cash
Bonds
U.S. Stocks
U.S. Micro Cap Stocks
What does it mean to have a balanced portfolio?
Includes stocks from companies from many different sectors, such as, energy, materials, industries, healthcare, etc.
Includes assets from different classes, such as, stocks, bonds, mutual funds, cash, hard assets, index funds
Includes balancing your financial goals and your personal goals to make sure they align.
All of the following are reasons that it is important to start saving or investing early. Which is the least important?
Money accrues more interest if saved or invested earlier (longer time for compounding interest).
You never know when an emergency will occur, and you may need your savings when it does.
You need to make sure you can buy all the cool stuff that you see your neighbors, friends, or family buying so you can look cool too.
You will have to invest more money if you start later in order to achieve the same retirement goal. As you age, the “catch up” savings for retirement will be huge to compensate for not saving when you were younger
Most millennials have saved little to nothing for retirement. Fight the peer pressure and save early and often!
Determine whether the action is an example of saving or investing:
Putting $20 per paycheck into an account ot help pay for books during college.
Saving
Investing
Determine whether the action is an example of saving or investing:
Buying shares in your favorite clothing company.
Saving
Investing
Which tip should you NOT give to someone who is about to invest their money for the first time?
Diversify your investments
Focus on the fees if you are investing in a mutual fund
Don't try to time the market, invest for the long term
Start early
Put all your money into a savings account, don't put it in risking investments
