Savings is  ...


Two Advantages of Saving are:

1.


2.


Two Disadvantages of Saving are:

1.

2.


Investing is ...


Two Advantages of Investing are:

1.


2.


Two Disadvantages of Investing are:

1.

2.



Why Save?
Savings Plan – set amount of money put away each pay (or  month or year).

1.

2.


The initial amount of money you invest (or save) is called the __________.

Interest:  The money you earn for letting others borrow your money.

i. When interest is expressed as a percentage (%) of the original investment, it is called _______________or __________


Two types of interest:

1. Simple Interest:



2. Compound Interest:



Let’s assume you have $1000 that you deposited into a savings account that pays you 5% compounded interest annually.
How much would you earn in 5 years?

Year Beginning of Year During Year End of Year

Year	Beginning Balance	Interest	Ending Balance
1	$1000	1000 x .05 = $50	$1050
2	$1050
3
4
5

The Language of Investing and Savings

When investing and saving, what is Liquidity? 
What does it mean the an investment is liquid?

Good investors diversify their investments.
When investing Diversification means:


Investment Vehicles:  Risk vs Reward

For each of the investment vehicles below
a) give a short description
b) advantages
c) Disadvantages
d) level of risk

(Consider organizing you answers in a table)

GICs: 

advantages	Disadvantages	level of risk

Bonds:

• CSBs
• corporate bonds

Mutual Funds

Stocks

• Preferred stocks
• common stocks

Index Funds


Real estate


Collectibles

Government Investment and Saving Programs

For each of the government investment/saving program below:
a) give a short description and purpose of the program, include what the funds can be used for when they are withdrawn.
b) advantages
c) Disadvantages
d) tax advantage (or government incentive to participate)

RESP

RRSP

TFSA

RRIF (or RIF)