One Key Strategy to Having Sufficient Savings Later in Life

question 9

Multiple Choice

One key strategy to having sufficient savings later in life is to start saving early. Why is this recommended?

• A) Saving money earlier in life gets you into the habit of saving, so you are likely to continue.
• B) You can take advantage of compound interest to grow your savings faster.
• C) You are less likely to fall prey to the sunk cost error.
• D) If you gain more money early, you will be more resistant to loss aversion if something happens to the stock market.

---

Definitions:

Natural Resources

Naturally occurring materials such as minerals, water, and fertile land that can be used for economic gain.

Global Warming

The long-term rise in Earth's average temperature, primarily due to the emission of greenhouse gases from human activities.

Disruptive Innovation

An innovation that significantly alters the way that consumers, industries, or businesses operate, often displacing established market leaders.

Digital Cameras

Electronic devices that capture and store photographs in digital format, allowing for instant viewing, editing, and sharing.