It’s Your Money – Make the Most of It How to Properly Invest
What are Stocks? • Literally – “pieces” of a company • You pay for the price of a share (1 stock) • However, this price changes each day • So, your goal is to buy when the stock is cheap and sell the stock once it increases in value • In other words, the company’s value has increased a lot. • Things to keep in mind: • Uncertainty in a company’s future hurts stock values • Often, world events also positively or negatively affect stock values • Example: Europe’s financial crisis caused United States stocks to decrease in value across the board
Background on Investing in Stocks • Many Americans invest in stocks without understanding that they can invest without taking a risk at all! • There’s a trick to investing • A LEGAL trick • If you use it, you can safely gain money over a long period of time with an average return more than most other options • Even better than investing in mutual funds, where you have to pay private managers large fees to pick the stocks • Therefore, I challenge all of you to beat me (and yourselves). • I will use the “trick,” and you will invest as you’d like.
Rules • Each person gets $5,000 fake money to invest and fills out the sheet (example on next slide) • You can’t go over the $5,000 • However, whoever makes the most over their initial investment wins • So, if I invest $4,700 that’s OK • We’ll check back every once in a while to see how our stocks are doing • I’ll update a leader board on the board • I’ll bring more financial advice in from time to time • Remember: always do what you want with your money • The information I provide is simply something that’s worked often for financial professionals (and Harvard Professors)
Advice ( “The Plastic Trap”) • First, DON’T fail to pay your credit card OR ANY other means of debt (like phone bill or store bill, etc.) • EVEN if it is only $0.01 • Know why? • Deregulation • Do “credit scores” exist? • Technically… • Next time: • Why college is affordable • B.A. worth $2.1M • Over high school Adapted from the Wikimedia Commons file “Smartcard2.png “http://en.wikipedia.org/wiki/File:Smartcard2.png