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Saving and Investing

Ben Franklin once said, "a penny saved is a penny earned." That is even more true today. With income tax, Social Security and other taxes, today a penny saved is equal to 1.5 pennies earned or even more.

Look at this chart or the Prudential Wealth Accumulation Calculator and compare starting saving at various ages, it really pays to start saving for your future early.

So now you have saved some money, how do you make it work for you and your future? The answer is investing. Investing is no simple task. You have to choose from thousands of choices. These choices can be divided roughly into the following categories:

stocks
- small company stocks
- medium-sized company stocks
- large company stocks
bonds
- corporate bonds
- treasury bonds, notes and bills
- Savings Bond
- municipal bonds
mutual fund
- stock mutual fund
  - small company fund
  - medium company fund
  - large company fund
  - growth fund
  - value fund
- bond mutual fund
  - corporate bond fund
  - treasury bond fund
money market fund and bank-issued products
- money market fund
- certificate of deposit(CD)
- savings account

In the next few lessons, we will talk about each of these investment options.

Online Resources

American Association of Individual Investors-AAII provides educational material to help individuals become better managers of their money.

National Council of Individual Investors-A national, self-supporting membership organization of individual investors. It provides investor education information to its members and advocates their interests in state and national government and industry policy debates.

InvestorGuide Advice on Advice-A comprehensive resource for investing and personal finance. Provide information about taking other people's advice about money.