Saving and Investing

Saving and Investing
Andrea Olson
Reward Yourself By Saving
• “Be in control of your
money, don’t have your
money control you!”
– Have a goal.
• What are you saving for? Be
specific. College, trip, etc.
– How much should I be putting
• You should have six to nine
months of income in your savings
Compounding Interest
• When interest is added to the principal, so
that, from that moment on, the interest that
has been added also earns interest.
• The higher the APY, the more interest you
Interest Formula
M is the final amount including the principal
P is the principal amount
i is the rate of interest per year
n is the number of years invested
Interest Formula
• What is the final amount of money you’ll have if
you invest…
– $1,000
– For 3 years
– With a 5% compound interest rate
– M=$1,000(1+.05)^3
– M=???
Shoe Saver vs. Super Saver
• Shoe saver puts away five dollars per day per
year in a shoebox under their bed
• Super saver puts away five dollars per day per
year. With 5% interest, compounded daily
• How much more money do you think the
Super Saver has made after 30 years as
compared to the Shoe box saver?
Shoe Saver vs. Super Saver
Adapted by Legacy Program from
• Choice Financial
Tips For Saving Money
• Prioritize your
• Make it an automatic
• Set aside “extra”
money into savings
• Pay your bills on time
• Save for retirement
• To save $1200 a year…it is…
• $100 a month
• $23.80 a week
• Or just $3.29 a day!
• “Let your money work for
• The key to successful
investing is buying when the
price is low, and selling when
the price is high.
• Investing involves risk, saving
does NOT.
• If you cannot afford to lose a
certain amount of money, do
not invest it.
Types of Investments
• Low Risk Investments
– Ex: Certificate of Deposit
• Bonds
– Low risk
• Stocks
– High risk
• Shares
• Mutual Funds
• Stocks make no promises; bonds are guaranteed
Rule of 72
Interest Rate=
Years it will take to double
your investment
Rule of 72
• Interest rate:8%
8 = ??
“A year from now, you may wish you
had started today”
-Karen Lamb
Works Cited
• “Hands on Banking: Money Skills You Need for Life.”
April 2012. <>
• Quinn, J.B. Making the Most of Your Money Now.
Simon & Schuster, 2009.
• Schickler, Scott. Conference Call Interview. 9 May 2012.
• Chokkavelu, Anand. “The 100 Things I’ve Learned in
Investing.” The Motley Fool. 16 Sept. 2012. Web. 29
June 2012.
• Buffet, Warren. Finance & Accounting. University of
Virginia: Darden Business Publishing, 2005.