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The uses of money What we'll learn: 1) What are the uses of money? 2) Why invest? 3) Don't forget about giving it, too. Everyone loves money — you can use it to buy all kinds of stuff, like burgers, iPods, and plane tickets to Costa Rica. And Americans are definitely good at spending money. But there's more that you can do with money than just spend it. You can save it, invest it, or — and let's not forget this — donate it to charity. Since you probably get the gist of spending it, we'll dive right into saving it. You've heard this since you were wobbling around the floor in diapers: save, save, save. Your parents were right... sort of. Everyone should have a rainy-day fund for when the car needs a new engine or when the cat needs her gallbladder removed. But what do you do with non-emergency money? Put it in your savings account? Perhaps a Certificate of Deposit (CD)? Well, that's way better than burying it in your backyard, but it's still not great. Why? Because your money is being lazy. Your money might be earning a little interest (one or two percent) if you put it in a savings account or CD, but it will barely keep pace with inflation, which is about three percent. That means your money is losing value every year. If you had $1,000 today, you would need to have $1,030 next year to buy the same amount of stuff. So how can your money keep up? Make it earn more for you. Enter the stock market. Investing your money gives it the opportunity to make more than one or two percent. (It also gives you the opportunity to lose more than one or two percent, but hopefully by the end of WeSeed's Learn levels, that won't be the case.) On average, the market pays out about eight percent. That's quadrupling what you would have earned by investing your money in a bank! And then let's remember that there's always charity. There's a saying we like to throw out every now and then: Make as much as you can, save as much as you can, donate as much as you can, and spend as much as you need. In all of this talk about making money, we should remember to give some back, too. Three Facts to Wow Your Friends at a Party 1) Warren Buffett made his first stock purchase when he was 11 years old. 2) In the 18th century, people would store their money in "pygg" (clay) pots or jars, which became known as "piggy banks." 3) The saying "Save your money for a rainy day" comes from an Italian comedy, The Bugbears, written in 1561. Read Case Study. Source : © 2011 We Seed. All Rights Reserved.