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Investing: Making Money Work for You

Investing: Making Money Work for You. NORTH DAKOTA PERSONAL FINANCE EDUCATION. Savings and Investments. Unique Investment Features. Unique Savings Features. Common Features. What are some features common to both investments and savings?. 72. Years Needed to Double Investment. =.

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Investing: Making Money Work for You

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  1. Investing: Making Money Work for You NORTH DAKOTA PERSONAL FINANCE EDUCATION

  2. Savings and Investments Unique Investment Features Unique Savings Features Common Features What are some features common to both investments and savings?

  3. 72 Years Needed to Double Investment = Interest Rate 72 = Interest Rate Required Years Needed to Double Investment Rule of 72

  4. Rule of 72: $10,000 Invested INTEREST RATE Year 3% 6% 12% 6 $20,000 12 $20,000 $40,000 18 $80,000 24 $20,000 $40,000 $160,000

  5. FinancialPlanningPyramid Com-modities Penny Stock Speculative Stock / Bonds / Mutual Funds Collectibles Blue-Chip Common Stock Growth Mutual Funds Real Estate Balanced Mutual Funds High-Grade Preferred Stock High-Grade Convertible Bonds Money Market Accounts or Mutual Funds High-Grade Corporate Bonds or Mutual Funds High-Grade Municipal Bonds or Mutual Funds Insured Savings / Checking Accounts U.S. Savings Bonds Certificates of Deposit Treasury Issues Highest Risk Highest Earnings Lower Risk Lower Earnings

  6. Impact of Higher Returns on Savings and Investments Rule of 72: The approximate frequency with which $100 doubles at specific interest rates 6 Yrs. 9 Yrs. 12 Yrs. 18 Yrs. 24 Yrs. Interest Rate 3% $200 4% $200 6% $200 $400 8% $200 $400 12% $200 $400 $800 1 2

  7. Investment Options

  8. Options Include • Savings accounts • U.S. savings bonds • Certificates of deposit • Money market deposit accounts

  9. Options Include • Money market mutual funds • Corporate and government bonds • Growth investments

  10. Options Include • Stocks • Real estate • Collectibles • Mutual funds

  11. $1,000 $1,000 $20 50 Dollar Cost Averaging One-time Investment Dollar-cost Averaging Shares Purchased Shares Purchased Amount Invested Share Price ($) Amount Invested Share Price ($) $1,000 $20 50 $100 $20.00 5.00 $100 $19.50 5.13 $100 $19.25 5.19 $100 $19.75 5.06 $100 $19.20 5.21 $100 $18.90 5.29 $100 $18.00 5.56 $100 $18.60 5.38 $100 $19.78 5.06 $100 $20.90 4.78 $19.39* 51.66 * Average Share Price 1 2 3 4

  12. ReadySetGo ReadySetGo

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