What Is Investing?
What is investing?
Using money to grow your wealth.
What do you own when you buy a stock?
A small part (ownership) of a company.
What does “risk” mean in investing?
The chance of losing money.
What is compound interest?
Earning interest on your savings and on the interest you’ve already earned.
Why is starting early important for investing?
The more time your money has to grow, the more you can earn.
What is the goal of investing?
To earn more money over time.
What is a bond?
A loan to a company or the government.
What does “reward” mean in investing?
The money you earn from investing.
Why does compound interest help your money grow faster over time?
Because each year, you earn interest on a bigger total (your savings plus past interest).
What do you need to do to make compound interest work?
Save or invest money and leave it there over time.
Does investing always come with risk? (Yes/No)
Yes
What is a mutual fund?
A group of people pooling money together to invest in financial assets.
Which is safer: a piggy bank or a brand-new stock?
A piggy bank.
In Year 1, if you invest $100 at 10%, how much do you have?
$110.
If you wait until age 30, what do you have to do to catch up?
Save more each month.
What is the main difference between saving and investing?
Saving is safer and for short-term goals; investing has more risk and is for long-term goals.
What do you get based on a mutual fund’s performance?
A return, or profit, based on how the fund does.
True or False: Bigger rewards usually come with bigger risks.
True.
Why does starting to invest early make compound interest more powerful?
Because the longer your money grows, the more interest builds on top of interest, making your money grow faster.
Name one tool from the slide that helps you invest later in life.
Savings account or investment account (like a retirement fund).
Give one example of a situation where you'd save vs. invest.
Open-ended
What does an index fund copy or follow?
A big list of companies, like the S&P 500.
Why do index funds and mutual funds have less risk than buying one single stock?
Because they spread out the risk by investing in many companies instead of just one.
Does compound interest grow more in one year or many years?
Many years — the longer, the better.
What are some tips listed for how to get started with investing later?
Start now, save regularly, be patient.