You will also want to think about what kind of saving (1)8 Q' ?& E/ u5 a1 @9 M7 e% q' K- D
instrument to use or what kind of investment to make. By
% a8 x0 ~' n+ R: y: k3 g3 g2 Lputting your money in some kind of savings instrument or- l8 ?, N. t( C* C7 U' w/ Q
investment, you can set side small mount of money regularly (2)
& L0 I3 S7 G, aand the money will earn interest or dividends. Interest refers, p4 A) b# ]+ D* J
to the amount what your money earns when it is kept in a (3)6 h% y! p% t" }+ P$ B/ a7 f4 S9 \
savings instrument. Dividends are payments of part of a3 V) \8 H" [' k$ r$ _
company' s earnings to people hold stock in the company. A (4)5 Q$ h( t. D3 V# F% G8 M8 A
savings instrument has an "interest rate" associated with it;
" {" d# M! ~. ~/ X1 F0 s( K7 nthis refers to the rate which the money in the instrument in- (5)
" i# }/ v" L: t# `; z; ^creases during a certain period of time. Principal refers to the
1 l8 ]5 x% O0 ~% b. p# |& d3 Qfacial value or the amount of money you place in the savings (6)
- W1 @( I* T& p1 m8 `6 Einstrument on which the interest is earned.1 J0 N" F0 ` E( l
Every type of savings or investment has some risk that; n" e9 f$ x1 w
the return will be less than needed or expected. Federally in-! ?4 @$ q+ t9 ?/ d+ K# [) x
sured savings accounts are safe and guaranteed up to $100,000
2 x% F; p& n" I) L! J8 Sby the U.S. Government. Therefore, they may have lower (7)
# H R3 l* P- x- uinterest rates, making it hard to save large amounts of money (8)
" l; x# H. }: D) v) A) W# V& Sfor college. Bonds and stocks often have higher returns than
0 s5 G) W: r: }4 }4 e3 e) b+ X" Lsavings accounts or EE savings bonds but are more riskier. (9)% M0 n2 L8 N/ l
You can reduce the risks of these kinds of investments by starting/ |" p% _ u0 m v/ X
to save early. The earlier we begin the less money you will (10)
) K- G' u- s; b; }8 N* f+ lhave to put aside each month and the more total savings you
' G m/ D2 `9 f4 @; H' uwill accumulate. |