Investing in Your Future

Activity

Students evaluate several types of investments to determine how they meet the criteria of growth, safety, and liquidity.

Evaluate the investment choices on the activity page for the four situations.

1. Which investment is best for someone who is young and wants to save for retirement?  Why?

2. Which investment is best for someone who is very close to retirement age?  Why?

3. Which investment is best for a young couple with small young children and who would like to purchase a home in 4-5 years?  Why?

4. Which investment choice is best for a single person who is 35 years old, owns a small home and does not plan to marry and have children?  Why?

Procedures     

1. Discuss the reasons for a long-term investment plan, such as education expenses, home ownership or retirement.  Establish the idea of “long-term” financial planning.

2. Review the various types of investments, stocks, bonds, etc., the advantages and disadvantages of each, and suggest how each type of investment might be appropriate for different people and in different situations.   

3. Introduce the concept of “risk.”  Discuss the factors that will affect people’s personal feelings about the potential for risk of loss of their investment funds.   Compare the risk of different investments, such as buying individual stocks vs. mutual funds.