5.02

_______________ is when you give your money, time, or energy to something in order to get a reward in the future-- usually a financial reward.

By investing money, and by saving money in accounts that offer ___________, you are putting your money to work.

Most financial advisors believe that money should be invested only after the following financial goals have been met:

• A plan and budget has been made for obvious financial needs such as housing and education.

• You have bought a house.

• • A financial reserve has been saved up, in case of emergencies.

• You are 30 years old.

__________ means that you can get your money out and use it easily.

Unlike a financial reserve, an investment is usually not very _________.

When you put your money into an investment, you are giving up the opportunity to make other investments with that money. This is defined as _____________________.

The U.S. has historically experienced ____________, which means money is steadily decreasing in value, so that you can buy less with $1.00 than you could in the past.

TRUE OR FALSE: When you are saving and investing, don't bother to pay attention to the inflation rate of your currency. Inflation does not determine if your money is increasing or decreasing in value.

• True

• False

____________ ____ is the possibility of losing money.

TRUE OR FALSE: Investors who are willing to take risks have the possibility of higher returns, but they also have a higher chance of failure.

• True

• False