Saving for Retirement. One day, we all want to retire.
After working for most of our lives, we imagine a time when we can stop working and have choice in how we spend our time. Because we're all living longer than ever before, it's going to take even more money to support our retirement. The secret to a financially secure retirement is to start saving now. Let's meet two retirees to make our first point. This is Simon.
Next, let's meet Caroline. Both Simon and Caroline have a long life ahead of them, but Caroline and her husband learned early in life that saving a little bit of money over a long time can make sure they retire comfortably. To retire like Caroline, the first step is understanding how to save for retirement. To start, you'll need a place to save it. To get an account started, you'll work with a representative to decide on an amount that you can contribute to the account with each paycheck. When you invest in stocks normally, they hopefully grow in value. Stock Markets. The numbers we see every business day can tell us important information about our economy, but where do they come from and what do they mean?
Let's get started by talking about companies. There are two basic types. The first is called a private company. Ownership in these companies is private, which means it's not available to everyone. They are usually small to medium-sized and there are a lot of them, from the bakery down the street to a local trucking company. Our focus is on companies that offer ownership to everyone. Let's say Zipper Corp is a successful company that has big plans. Now, Maya's share of the company has a value that typically changes each business day. For example, people who believe the button factory is a good move, may want to buy Zipper Corp shares because they think the value will increase.
Each business day, shares change hands, depending on how people feel about the company's future value. Investing Money. Most of us look forward to a comfortable future.
To get there, you’ve got to be smart about using your money to make more money. We know that putting money in savings helps you make more money over time thanks to interest. It’s predictable and based on an interest rate. However, there are ways to make more money if you’re ready to take risks. Consider this. The best way to deal with risk is to be informed. Now, of course I’m not talking about getting from town to town, but reaching your financial goals. There are many ways to invest. So, you give her company money and you become an owner in a tiny part of the company. The same is true for the stock market. Now, the stock market and private businesses aren’t the only kinds of investing.
Whether it’s a friend’s coffee shop, the stock market, or antiques, the big ideas are the same. Investing is serious business, and every investment comes with different risks.