Because of compounding, you can end up with considerably more return on your savings, however small they may be at first, if you start young. Not only do your savings have longer to multiply and grow, but they will grow the most toward the end of the investment period. By investing early, you can insure a better financial future for yourself and your family.
In general, the greater the potential return on an investment, the greater the risk. Knowing your investing timeline will help determine how much risk you are willing to accept. If you are young and beginning to save for retirement, you may be willing to accept the higher risk associated with mutual funds and stocks in order to achieve higher growth since fluctuations in the market tend to average out over time. However, if you are saving for college or a new car, for example, and your investment period is shorter, you might choose safer investments such as Savings Accounts and Certificates of Deposit (CDs). Consider how soon you will be needing your investment funds and your own personal tolerance for risk to determine which investment options are right for you.
Remember, compounding works when you keep your interest and dividends invested. Ask a Community Bank associate for more details on this easy way to make your money work for you.
Use the chart below to track your savings per month, and watch it grow over time. The chart shows the results of a minimum savings of ten dollars per month. To get the figures with your amount, take your monthly savings amount and divide it by 10, then multiply that number by the end result or one of the milestones.
Operated by Bank of America, N.A. Member FDIC. Equal Credit Opportunity
© 2010 Bank of America Corporation. All rights reserved.
