I have a little extra money and a little extra time on my paws; I think i want to try investing in some stocks.

Hmm I have children and dont really have time to pay attention to stocks. I think im going to save for future instead.

Sadie is a younger dog with lots of time on her paws and recently ran into a little bit of extra money. Instead of splurging on goods and services she doesn't really need, Sadie decided to invest her money in stocks using portfolio diversification.

Charlie however is an older dog with lot of puppies. She wants to start saving for when she stops working at the paw treat cafe and make sure her children have a good inheritance. Charlie decided to start saving her money using an IRA

Using the least risky method of investing in the stock market, or the diversifying method, Sadie thinks its smart to buy shares in puppy toys, treats, and electricity.

Sadie bought 20 shares of the toy company at $60 each, 20 shares of the treat company at $60 each, and 20 shares of the electricity company at $60 each. She invested a total of $3,600

Charlie, being a mother of 3, comes up with a plan for her IRA to set aside $3,000 annually  for 30 years toward her retirement and the future of her puppies.

Because Charlie choose to save using IRA, the money she is saving is tax-sheltered until she decides to use the money, which will be when she is retired and in a lower tax bracket.

A FEW WEEKS LATER

Sadie noticed that the value of her shares were fluctuating daily. The value of each of her treat shares would increase to $180 while the value of each of her toy shares would drop to $30 and the value of each of her electricity shares would increase to $120 a share.

If sadie sold 10 shares of each company at this point, sadie would make $3200 which would mean she spent $500. Dont forget Sadie didnt sell all of her shares.

30 YEARS LATER

30 years later and Charlie has retired, and her pups have taken over her paw treat cafe. Charlie consistantly invested $3000 into her IRA, and is ready to use the money during her retirement.

After investing $3000 annually for the past 30 years, Charlie has saved $90000 (before taxes) for her retirement and for her family.