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PF 8.01 (Savings & Investing)

PF 8.01 (Savings & Investing). By PresenterMedia.com. Definition. Saving. Investing. Saving is setting aside present income for future use. Savings is the portion of income not spent on consumption. Investing is putting money to work so that it earns interest over time.

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PF 8.01 (Savings & Investing)

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  1. PF 8.01 (Savings & Investing) By PresenterMedia.com

  2. Definition Saving Investing • Saving is setting aside present income for future use. • Savings is the portion of income not spent on consumption. • Investing is putting money to work so that it earns interest over time. • Investments are assets purchased with the goal of increasing income.

  3. Primary Purpose Saving Investing • To make money available for future needs • To make a profit over time

  4. Reasons for doing so… Saving Investing • To prepare for emergencies • To prepare for major purchases • To achieve financial goals • To pay recurring expenses • To prepare for future purchases • To prepare for retirement

  5. Interest Earnings Saving Investing • A bonus or side-benefit • The main focus

  6. Return Saving Investing • Usually earns lower rates of interest • Usually earns higher rates of interest

  7. Liquidity Saving Investing • Money may be withdrawn at any time • Money may not be easily accessible

  8. Volatility Saving Investing • Usually not volatile; rates are fixed • Rate of return and value may change suddenly and significantly

  9. Risk Saving Investing • Usually little risk of losing money • Usually more risk; risks may be necessary to make a profit

  10. Questions about the difference between saving and investing?

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