LAP: QS-030 Objectives Discuss the nature of financial needs and goals. Describe the benefits of saving and investing.

Objective Discuss the nature of financial needs and goals.

 Food  Clothing  Shelter — the basics that are essential for survival

 Vacations  Homes  Education  Retirement — things you’d like to purchase above and beyond the basics

Not legal tender  Increase in the cost of goods and services  About 3.5 percent a year Not legal tender

Objective Describe the benefits of saving and investing.

 Taking a portion of your current income and putting it away for future use  Important for reaching short-term financial goals

Only you can decide how much to save. Make sure you still have enough to enjoy life now.

 Take it off the top.  Plan with your family.  Spend less.

Savings accounts earn a small amount of interest. Not the best way to make money or create wealth

Building wealth by using money to make money Important for reaching long-term financial goals

Earning interest upon interest Three key factors: The amount of money you invest How long your money is invested How much your investment grows each year

Saving and investing work hand in hand. Compounding is your best friend because time is on your side. Getting started early is the key to successful investing. Saving Investing

Investment One-time $500 Fast Forward to Age 67 $500 annually Charlotte (begins investing at age 17) $60,000 $700,000 Spencer (begins investing at age 22) $36,000 $430,000 Difference $24,000! $270,000!

MarkED Acknowledgments Original Developers Lelia Ventling and Sarah Bartlett Borich, MarkED Version 1.0 Copyright  2007 MarkED Resource Center

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