Their Contributions: Chris
starts making contributions at
age 18 and stops at age 28,
leaving the money invested.
Pat waits until age 38 to start
investing and continues making
contributions until age 68.
The Results: Chris
contributed one-third
as much as Pat. Yet
Chris’s ending balance
at age 68 is over twice
as great.
Advantages
Disadvantages
You can plan exactly what
type you want.
Your money is tied up for
years without earning
interest
You can lock in today’s prices If you move you may not be
able to transfer your funeral
arrangements
Funeral home may go out of
business.
- MONEY
- TIME
- INTEREST
RATE
$50/MONTH
$400/MONTH
7%
7%
33 YEARS
33 YEARS
$126,398
$1,010,928
8 YEARS
31 YEARS
AGE 25 – 33
AGE 33 – 65
$2,000/YEAR
$2,000/YEAR
$18,000 TOTAL $62,000 TOTAL
INVESTMENT INVESTMENT
$909,280
$555,678
SAVINGS
ACCOUNT
$10,000
MUTUAL
FUND
$10,000
5%
14%
20 YEARS
20 YEARS
$26,533
$137,434
NAME
ADVANTAGE
DISADVANTAGES
PASSBOOD *Few restrictions
ACCOUNT *Unlimited
withdrawals
NOW
*Checking
ACCOUNTS privileges
*Low rate of return
MONEY
MARKET
High minimum deposit
Limited # of withdrawals
Higher interest rate
than savings
*High minimum
deposit
*% rate can drop
T-BILLS
*Interest tax exempt *High minimum
deposit
*Easily sold
STOCKS
*High gains
*High risk
*Must track daily
GOLD &
SILVER
*Holds value when
others don’t
*Doesn’t earn interest
*Not always liquid
MUTUAL
FUNDS
*Diversified
*Professional manager
*Easily sold
*Risky