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Investing - PowerPoint PPT Presentation

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Investing. Making money with money Investing = Saving It involves risk—you can lose your $$. Remember our 3 tools to save?. Savings Account Money Market Account Certificate of Deposit (CD). Stocks Bonds Mutual Funds. Currency Real Estate. What are some ways to invest?.

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  • Making money with money

    • Investing = Saving

  • It involves risk—you can lose your $$

Remember our 3 tools to save?

  • Savings Account

  • Money Market Account

  • Certificate of Deposit (CD)



Mutual Funds


Real Estate

What are some ways to invest?

Unique Investments…

  • Collectables

Rule of 72’s

  • The time or the interest rate you need to double your money

    • 72/t=int

    • 72/int=t

Simple Interest Vs. Compound Interest

  • Simple – Interest paid only on principle amount

  • Compound- Interest paid on principle and also on previously earned interest

*See Interest Worksheet

Retirement Plans

  • Pension Plans

    • A retirement plan set up by your employer

  • IRA’s

    • Must wait until 59 ½ to access money

    • Special tax benefits

    • Used if employer does not offer a pension plan

Retirement Plans

  • 401K

  • 403B

  • SEP Plans

    • Plan if you worked for a small business

Mutual Funds

  • A collection of investments

    • Diversification

    • Minimize risk

  • Professional manager

  • Many investors


  • Ability to convert your assets to cash quickly

    • Cash

    • Stocks

    • Houses/Cars/Jewelry

Dollar Cost Averaging

Letting your money work for you over time


Spreading your money out over different investments

Ie: stocks, bonds, mutual funds, etc.

Investing Choices

Now What?

  • How does diversification help limit risk?

  • How does age and financial situation affect how you make investment decisions?

The Stock Market


Represents ownership in a corporation

Market Value

  • The amount of money you can sell your investment at in the market place.




London, Japan, etc

S&P 500


Nasdaq Composite

NIKKEI in Japan

Stock ExchangesIndexes

Dow Jones


  • Share of the profits from a corporation

  • Receive dividends for each share

How are earnings made on stocks?

  • Dividends.

    • Dividend are usually paid quarterly

  • Buy Low & Sell High

Advantages of Stock Investments

  • If the market value goes up, the gain can be considerable

  • Liquid

    • Money is easily accessible


  • If the market value goes down, the loss can be considerable

  • Time


  • A block of stock is one hundred (100) shares.

  • Preferred

  • Common

    • Blue Chip

    • Growth

Stock Line

Yahoo Finance - Apple Inc.

Who protects the interest of investors by regulating companies that sell stock?



Carry less risk than a stock

is an IOU, certifying that you loaned money to a government or corporation and outlining the terms of repayment

How Bonds Work

  • Buyer purchases bond

  • Fixed interest rate

  • Fixed period of time

  • When matured it is redeemed for full face value

Bond Types

  • Federal Government

  • Municipal

  • Corporate

Federal Bonds

  • The federal government issues bonds to pay for services; military, roads, infrastructure.

  • Virtually NO RISK!!

    • Savings bonds, Series EE & HH

Municipal Bonds

  • State or local governments issue bonds for the construction of buildings, roads, schools, etc.

  • Moderate, if any, risk

Corporate Bonds

  • Issued by a Business to raise money for a capital venture.

  • Higher risk

  • Better rates of interest


  • US savings bond least risk

  • Corporate bond

  • Preferred stock

  • Common stock most risk

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