1. PF 8.01 (Savings & Investing)
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2. Definition Saving is setting aside present income for future use.
Investing
Saving is setting aside present income for future use.
Savings is the portion of income not spent on consumption.
Investing is putting money to work so that it earns interest over time.
Investments are assets purchased with the goal of increasing income.

3. Primary Purpose To make money available for future needs
Saving
Investing
To make money available for future needs
To make a profit over time

4. Reasons for doing so… To prepare for emergencies
Saving
Investing
To prepare for emergencies
To prepare for major purchases
To achieve financial goals
To pay recurring expenses
To prepare for future purchases
To prepare for retirement

5. Interest Earnings A bonus or side-benefit The main focus Saving
Investing
A bonus or side-benefit
The main focus

6. Return Usually earns lower rates of interest
Saving
Investing
Usually earns lower rates of interest
Usually earns higher rates of interest

7. Liquidity Money may be withdrawn at any time
Saving
Investing
Money may be withdrawn at any time
Money may not be easily accessible

8. Volatility Usually not volatile; rates are fixed
Saving
Investing
Usually not volatile; rates are fixed
Rate of return and value may change suddenly and significantly

9. Risk Usually little risk of losing money
Saving
Investing
Usually little risk of losing money
Usually more risk; risks may be necessary to make a profit

10. Questions about the difference between saving and investing?