Growing Money – Junior Series

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, your investment won’t increase much. After 20 years, you will have $122.02. With a 5% return, you more than double your money to $265.33. And with a 10% return, your money grows more than six times to $672.75!

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?
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