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
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
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a) give a short description and purpose of the program, include what the funds can be used for when they are withdrawn.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)