Risk and Return

Most young people spend very little time thinking about saving or investing money for the long term, and do not see either as having any relevance to them. They often feel that they have little money left over to save, and they are not prepared to forego spending money on such things as going out, clothes, sports or driving lessons in order to save or invest their money in something that will not give them a return for many years. Moreover, many of them have heard of investments made by their parents and friends of parents that have ‘gone wrong’, leaving the investor, after many years of paying sometimes large amounts of money into saving schemes or pension funds, with less than they invested in the first place.

Your aim in this activity is to produce an article which could be included in your school magazine and which would encourage young people to invest or save even small amounts of money from an early age. In this article you would have to inform them about the potential risks of investment and the possible returns, suggesting a number of worthwhile sources for current information. You would need to consider the different types of savings/investments and the time scales involved. The advantages of short, medium and long term savings and investments will differ considerably depending upon individual circumstances and requirements. In order to complete this article you will need to investigate the financial system, particularly regulations in place to protect the investor, any guidance available to consumers on saving and investing and examine the range of advantages and disadvantages posed by various kinds of investment/savings options available to 18 year olds.