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Types of Investments. RRSP’s and RESP’s. RRSP’s or Registered Retirement Savings Plans and RESP’s or Registered Education Savings Plans :These are payment plans that you make at a bank that allows you to place your money in an account that pays you high levels of compound interest.
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RRSP’s and RESP’s • RRSP’s or Registered Retirement Savings Plans and RESP’s or Registered Education Savings Plans :These are payment plans that you make at a bank that allows you to place your money in an account that pays you high levels of compoundinterest. • After a period of time, you can withdraw your money and use it as income, or funds to pay for something you want. • With a RRSP or RESP you make weekly, monthly, or yearly payments and the bank is paying you interest on that money, which can build up quickly.
RRSP • Registered Retirement Savings Plans are for people who are trying to save for their retirement. • When you retire you either make only a portion (50 – 70%) of your regular salary, if you make any money at all; so lots of people save money for their retirement so that they will have a lot of money to spend to make their retirement enjoyable.
RESP RESP’s are for new parents, children, or new grandparents who want to put money away for a loved one’s education in the future. Costs of post-secondary education continue to rise annually, so the need for extra funds to pay for that education is increasing.
GIC’s & Canada Savings Bond • GIC’s or Guaranteed Investment Certificates, and Canada Savings Bonds are pieces of paper, that look like bills, but are a guarantee that your money will increase in value at a set % per year. • The only thing that may stand in the way of you getting your money is the country going bankrupt.
Lets think about bonds: How do people earn money with bonds? Sell them for a profit, more than they bought it for. Earned interest on it When do people lose money on bonds? When the selling price and interest earned are less than they paid for it.
Stocks Stocks are the most exciting form of investment. They provide the greatest percentage return on your money, but also present the greatest level of risk. Buying and selling stocks can often be compared to gambling in Vegas… you never know which stocks could win you a lot of money and which could lose you a lot of money. The stock market is a place of high stress and high finance.
Lets think about shares: How do people earn money with shares? Sell them for more than they bought them for Earn dividends When do people lose money on shares? When the selling price and the dividends earned are less than what you bought them for
Mutual Funds • Mutual Funds are a huge collection of stocks that are fairly likely to increase. • Mutual Funds are usually a collection of ‘blue chip’ companies and some highly active smaller stocks that are invested to make you a fairly large return on your investment, but are not quite the level of risk of regular stock purchases.
Lets think about Mutual Funds: How do people earn money with mutual funds? Sell for more than the bought it for Earn dividends When do people lose money on mutual funds? When they sell for less than they bought them for.
Risk vs. Profit For all investments there is an element of risk. As risk increases, the money made off the investment goes up. Investments with very little risk pay very little money in return for the investment.
