Difference Between Saving & Investing Savings Savings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money Investing Investing • Mid-to-Long Term needs (> 5 years) • Greater Volatility and No Guarantees • Large Potential Return
Difference Between Saving & Investing SavingsSavings Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money.
Jan 13, 2016
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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
“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
$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?
Risk vs. RewardRisk vs. Reward
The Stock Market:An Introduction
The Stock Market:An Introduction
Risk vs. RewardRisk vs. Reward
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
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
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