Compound interest is the eighth wonder of the world.

Although you must be 18 to invest money independently, it’s never too early to be educated on investing. Understanding what investing is and the risks that can come with it is another part of gaining financial literacy.

The Four Buckets

Think of your money as water divided into four buckets, spending, saving, donating, and investing.

The spending bucket takes care of expenses you need to pay and expenses for what you want.

The saving bucket is where you put money aside that you want for future use—for example, saving up money to purchase a car.

You put the money you want to donate or give back in the donating bucket. This bucket is optional but recommended for helping organizations and people in need.

The last bucket is for investing. A good rule to stick with is putting 10% of your income into the investment bucket.

Over time, the first three buckets will lose water from sitting in the sun.

However, the investment bucket is sitting under a rain gutter, and rain frequently trickles in, causing it to overflow. When investing is done right, the investment bucket can have enough water to refill the other three buckets.


Stax- Investing Online Game Build Your Stax

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