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Investing Can Be Rewarding, But It's Also Risky


A savings account is a great place to store your money at first. It’s safe and it pays a little interest. But it won’t make you rich! Growing your money requires that you move some of it into investments with a higher rate of return.

Many financial experts suggest that your money should be growing somewhere between 5% and 10% per year. You won’t get that from a savings account these days.

Just compare $100 in a savings account earning 1% interest per year with an investment earning 5% per year and another earning 10% per year.

At 1% interest, you’re earning just a few pennies per year. After 20 years, you’ve earned only $20. With a 5% return, you more than double your money to $271.85. And with a 10% return, your money grows more than seven times to $738.70!

However, investments aren’t insured like your savings account. You take the risk of losing everything if your investment becomes less valuable.


Questions:

  1. Would you rather know that your money is safe while it grows a little bit, or would you be OK with taking a risk while your money possibly grows a lot?
  2. Are you willing to put a portion of your savings away for a long time to watch it grow?
  3. Is there a company or product that you would like to invest your money in?

Additional Resource Material

Below are some extra educational resources you can use at home or in your classroom!


 It’s a Money Thing is a registered trademark of Currency Marketing.

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