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Difference Between Saving & Investing. Savings. Short-to-Mid Term needs (< 5 years) Guaranteed Return Low Return Primarily a “parking space” for money. Investing. Mid-to-Long Term needs (> 5 years) Greater Volatility and No Guarantees Large Potential Return
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Difference Between Saving & Investing Savings • Short-to-Mid Term needs (< 5 years) • Guaranteed Return • Low Return • Primarily a “parking space” for money Investing • 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!” “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
Why take the risks of investing? Because inflation steals your money's value. $120.00 $100.00 saved in your piggy bank in 1987… $100.00 $80.00 $60.00 …is worth only $53.23 in 2007 $40.00 $20.00 $0.00 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
