SAVINGS AND INVESTMENTS IVONA RADANOVIĆ SAVINGS
INVESTMENT
Saving ist a portion of disposable income not spent on consumption of consumer goods
Investment is an act of putting money, effort, time, etc. into something to make a profit or get an advantage.
Savings accounts allow you to deposit, withdraw, and earn interest on your money.
Capital investment is a sum of money provided to a company to further its business objectives • Additional or improved capital goods increases labor productivity making companies more productive and efficient • business investment through purchases of capital goods increases the annual GDP
TYPES OF SAVINGS 1. Savings deposit accounts • It is an interest – bearing bank account that allows you to withdraw money at any time 2. Student savings accounts • these are savings accounts some banks offer specifically for young people enrolled in high school or college 3. Joint Savings Accounts • A joint savings account is a savings account owned by two or more people 4. Piggy bank • A piggy bank is a small container shaped like a pig, with a narrow hole in the top through which to put coins. Children often use piggy banks to save money
PROS AND CONS OF SAVING PROS OF SAVING:
1. Your money is kept safe. 2. Savings accounts earn interest 3. you’ll have financial back-up 4. No risk involved 5. Liquidity
CONS OF SAVING: 1. Low Rates of Return 2. Withdrawal Restrictions 3. Fees and Minimum Balance Requirements
TYPES OF INVESTMENT: 1. Stocks • A stock is an investment in a specific company 2. Bonds • A bond is a loan you make to a company or government. When you purchase a bond, you’re allowing the bond issuer to borrow your money and pay you back with interest. 3. Options • An option is a contract to buy or sell a stock at a set price, by a set date. • Options offer flexibility, as the contract doesn’t actually obligate you to buy or sell the stock
PROS OF INVESTMENT: • You Stay Ahead of Inflation If you don’t invest and grow your money, you’ll actually end up losing money over time. This is all thanks to inflation. • Investing Will Help You Build Wealth • Invest To Meet Other Financial Goals You can also consider investing to help grow your money to meet other financial goals.
CONS OF INVESTMENT: • High expense ratios and sales charges • Brokerage commissions kill profit margin • Time consuming