Save or Invest?
This is meant for short-term goals
Saving
This type of investment account is set up specifically for growing your money to have for when you no longer have an income.
This type of objective focuses on protecting the initial investment from significant losses
Preservation of Capital or Safety
An investment that represents ownership in a company or corporation.
Stock
You can earn interest in this type of bank account
Savings Account
This involves assets such as stocks, bonds, and mutual funds
Investing
This kind of retirement account allows you to take immediate tax deductions from your income and has you pay taxes later
Tax Deferred Account (401k, 403b, IRA)
This type of objective focuses on generating a regular stream of income from investments with dividends, interest, or rental income.
Income
A fixed-income instrument that represents a loan made by an investor to a borrower
Bond
This kind of interest is only calculated on the original amount on the money borrowed
Simple Interest
This involves very little risk
Saving
This type of account provide future tax benefits rather than tax breaks on contributions since withdrawals at retirement are not subject to taxes.
Tax-Exempt Account (Roth IRA, Roth 401k)
This type of objective focuses on the overall increase of the investment over time.
Capital Appreciation or Growth
A type of investment fund (similar to a mutual fund) that trades on the stock exchange like a stock.
Exchange Traded Fund (ETF)
This type of investment receives interest upon maturity when lender is paid back
Bonds
This is meant for medium or long-term goals
Investing
Funds are taxed at either short term or long term capital gains( which is typically higher than ordinary income tax) in this type of account.
Brokerage Account
Someone may have this type of secondary objective if they are looking to spread their risk across different investments.
Diversification of investments
A fund portfolio constructed to match or track the components of a financial market index, such as the S&P 500.
Index Fund
This kind of interest is calculated on the original amount of money borrowed and the accumulated interest of previous periods.
Compound Interest
Your total account balance will be impacted by the market
This type of tax-exempt account is opened on your own through an investment firm
Roth IRA
Someone may have this type of secondary objective if they want to be able to turn their investments into cash quickly.
High Liquidity
Investment where money from many people is pooled together to buy a variety of different stocks, bonds, or and other types of investments.
Mutual Fund
Aside from owning individual bonds, what is another investment that can receive interest?
Mutual Funds