Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Ben is 24 and wants to start saving for retirement. Which of the following actions would best help him set himself up for long-term financial success?

Wait until he is older to start investing, so he can contribute larger amounts at once.

Begin investing early in a diversified portfolio of securities and contribute regularly to a retirement account.

Keep all his savings in a regular checking account to avoid market risk.

Invest only in high-risk stocks to maximize potential returns quickly.

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Verified step by step guidance

Understand the concept of compound interest: Starting to invest early allows Ben to take advantage of compound interest, where earnings on investments generate additional earnings over time. This is a key principle in long-term financial success.

Learn about diversification: A diversified portfolio reduces risk by spreading investments across various asset classes, such as stocks, bonds, and mutual funds. This helps balance potential returns and risks.

Recognize the importance of regular contributions: Consistently contributing to a retirement account, even in small amounts, builds wealth over time and ensures steady growth.

Avoid common pitfalls: Keeping savings in a checking account may avoid market risk but limits growth potential due to low interest rates. Similarly, investing only in high-risk stocks can lead to significant losses and is not suitable for long-term stability.

Focus on long-term planning: Ben should prioritize a strategy that combines early investing, diversification, and regular contributions to achieve financial security by retirement age.