Chapter 6: Saving and Investing

When you save your income, the economy as a whole benefits. Saving provides money for others to invest or spend. Saving also allows businesses to expand, which provides increased income for consumers and raises the standard of living. Chapter 6 provides the considerations that can help an individual decide how much income to save and how much to invest.

Savings Accounts
The many types of savings plans and investment opportunities—as well as the advantages and disadvantages of each—are the focus of the first section in the chapter. Savings accounts are available through various savings institutions, and their characteristics are listed.

Investing
Also explored are the stock and bond markets, the differences between stock and bond investments, and the regulation of securities. Three types of retirement plans—pension plans, Keogh Plans, and Individual Retirement Accounts—are reviewed. Concluding the chapter is a discussion of the factor of risk in investing and the importance of diversifying investments.