What Are the Benefits of Investing - Financial Literacy - أول ثانوي

4.2 What Are the Benefits of Investing? Learning Objective Once you have completed this lesson, you should be able to: ⚫ identify three key benefits of investing. Key Terms Lifestyle Tadawul All Shares Index (TASI) The Benefits of Investing Investing money is important because it means you are planning for future needs and wants. It helps you meet your financial goals and provide for your future financial security. There are many reasons for investing, however three of the most important are: 1. to meet life goals 2. to protect your money from inflation 3. to save for retirement. Link to digital lesson www.iem.edu.sa 1. To Meet Life Goals Investing can help you to reach your long-term goals to maintain, or even upgrade, your lifestyle. Investing means you may build wealth to buy a large item like a car or a house, or pay for a child's international education. For instance, if you invested SAR 1,000 in 2010 into Tadawui All Shares Index (TASI), your investment today would be worth SAR 1,419 - a 42% increase on your capital. As shown in Figure 4.2.1, the highest annual return during the 2010-2020 period was 25.5% and, although the lowest was -17.1%, the value of your investment increased in the long term. Lifestyle the habits, tastes, moral standards, and economic level that, combined, are the normal standard of living of an individual or group Tadawul All Shares Index TASH the Saudi Arabian Stock Exchange وزارة التعليم 1021-1465 CHAPTER 4 Investing 123

FIGURE 4.2.1 30º 25.5% Annual Performance of Tadawul All Shares Index in Saudi Arabia 2010 to 2020 20% وزارة التعليم τισμικό (50 10% 8.2% 640 10% 2.4% -3.1 8.3% 72% 4.5% 1.6% 0.2% 20% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2. To Protect Your Money From Inflation Investing helps protect your money from inflation. If you have savings which you do not invest, you will lose money over time. 3. To Save for Retirement The government pension in Saudi Arabia (2022) is calculated by using a person's average monthly earnings during the last two years of work- ing, up to a monthly maximum figure. Men and women must be at least 60 years old, and must have met certain other conditions. In order to make sure that all Saudi citizens who have contributed are able to have a satisfactory standard of living, the government ensures there is a minimum amount paid to those who have retired. It is important to predict what your outgoings will be when you retire and assess whether the government pension will cover your wants and needs. 124 Financial Literacy

Review Questions Choose the correct answer. 1. Investing is not necessary for your future financial security. a. true b. false 2. Which of the following is NOT a benent of investing? a. you will meet your life goals b. you can lose all your money c. your assets will be protected from inflation d. you can save for retirement 3. Which of the following statements about pensions is incorrect? a. Men can save for government pensions. b. Women can save for government pensions. c. There is a minimum government pension age. d. There is a maximum government pension age. Men and women have the same retirement age. b. Talse جوار كل ايم (173-1465 Will the government p be enough for you to enjoy your retirement? CHAPTER 4 Investing 125