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Saving and Investing
1
Do you save a portion of your income each month?
Yes
By saving money each month, you can protect against unexpected expenses or drops in income, and reach your longer-term financial goals.
 
Saving and Investing
2
Imagine you put your savings in cash “under the mattress” and inflation is 2% per year. After 1 year, you would be able to buy more with your money than you can today.
No
Inflation means that the price of goods and services is increasing. Therefore, after 1 year, you would be able to buy less with your money than you can today.
 
Saving and Investing
3
When individuals receive compound interest on a deposit, they earn interest on the deposit and on the interest they previously earned.
Yes
An individual earns compound interest on both the initial deposit and on all previous interest payments.
 
Saving and Investing
4
Do you contribute money regularly to a retirement account?
Yes
By contributing regularly to a retirement account, you can boost your long-term financial security.
 
Saving and Investing
5
With most financial investments, the lower the risk of loss, the higher the rate of return.
No
With most financial investments, the lower the risk of loss, the lower the rate of return.
 
Saving and Investing
6
Over the long term, buying a single company’s stock is usually less risky than buying a stock mutual fund.
No
Buying a single company’s stock is usually riskier than buying a stock mutual fund. A stock mutual fund is made up of several stocks, so buying a mutual fund is a way to diversify your investments and thereby reduce risk.
 
Saving and Investing
7
A good first step to determining how much you need to save for retirement is to estimate what your annual expenses will be at retirement.
Yes
By estimating what your expenses will be during retirement, you can get a better sense of how much you need to save.