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P 500 stock index has increased almost 200 percent since 1970. On average, the stock market returns 12 percent per year, including dividends. Savings rates, by parison, have been much lower – anywhere from % to 5%, usually depending on the length of time the savings are deposited. 21 Slide 3 Places to Invest Lesson Reference: Money Management, Activity 4 – Overhead 3 PLACES TO INVEST ? Stocks ? Bonds ? Mutual Funds ? Retirement Plans ? Real Estate ? Collectibles/Valuables 22 QUESTIONS TO ASK BEFORE MAKING AN INVESTMENT 1. How safe is the investment? 2. What types of returns can I expect? 3. What kind of risk is involved? 4. Can I get my money back if I need it? How long will it take and how much will it cost to get it back quickly? 5. Are my investments in a variety of places to spread my risks (diversification)? Slide 4 – Questions to Ask Lesson Reference: Money Management, Activity 4 – Handout 2 23 INTERNET PRIVACY amp。? Activity 1………………Saving vs. Investing ? Activity 2……….….Saving for a Rainy Day ? Activity 3……………………..1 + 1 = Saving ? Activity 4…..Investing for the Long Term Money Management Activity 1 ACTIVITY 1 Saving vs. Investing Overview ? Saving vs. investing ? Information on a paycheck ? Making a financial plan ?