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Financial Education and Training Institute Savings and Investing Linda Jekel Dir. Credit Unions Jeremy Lushene Education & Outreach Department of Financial Institutions ( www.dfi.wa.gov ) Discussion Savings and Investing Overview Why Teach Saving and Investing? Key Concepts to Introduce

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savings and investing

Financial Education and Training Institute

Savings and Investing

Linda JekelDir. Credit Unions

Jeremy LusheneEducation & Outreach

Department of Financial Institutions (www.dfi.wa.gov)

discussion
Discussion
  • Savings and Investing Overview
  • Why Teach Saving and Investing?
  • Key Concepts to Introduce
  • Resources and Activity Ideas
key savings concepts
Key Savings Concepts
  • Pay Yourself First
  • Set Goals
  • Put Time to Work for You
wants and needs
Wants And Needs
  • In order to decide how to spend and save – identify wants vs needs
  • Every age can decide what is really important, has lasting value, and how to save.
emergency savings
Emergency Savings
  • 3-6 Months Worth of Living Expenses
  • Recession? 6 Months
  • Accounts Should Be Liquid
liquidity
Liquidity

Things to think about:

  • How Easy Is It To Get To Money?
  • Are There Penalty's?
compound interest
Compound Interest
  • Interest On Your Interest
  • Daily, Weekly, Monthly,Quarterly, Yearly
types of savings
Types of Savings
  • Savings Accounts
  • Money Market Accounts
  • Certificate of Deposits
traditional savings accounts
Traditional Savings Accounts
  • Account That Earns Interest (1.22% Avg)
  • Typically Liquid
  • Shop Around For Rates
money market accounts
Money Market Accounts
  • Usually Pay Higher Interest
  • Usually Higher Minimum Balance
  • Limited # Of Withdrawals (3-6 Month)
certificate of deposits
Certificate Of Deposits
  • Deposit A Specific Amount Of Money For A Specific Amount Of Time
  • Higher Interest Than Traditional Savings
  • Usually Penalty If You Withdraw Early
where would you store your money
Where Would You Store Your Money
  • For Emergency Savings?
  • Down Payment For A Car You Plan To Buy In 6 Months?
  • For A Vacation You Are Saving For?
keys to savings success
Keys To Savings Success
  • Pay Yourself First
  • Choose Accounts That Meet Your Goals
  • Keep Emergency Savings
  • Review Goals and Adjust As Necessary
why teach savings
Why Teach Savings?
  • May Not Be Taught At Home
  • Students Have Ambitious Goals
  • Time Is On Their Side
  • Disposable Income
  • Help Develop Lifelong Habit
the 5 concepts
The 5 Concepts…
  • Wants vs Needs
  • Emergencies Happen
  • Goals Can Be Achieved (Budget)
  • Time Is On Their Side (Compound)
  • Pay Self First
how to grab students attention about saving
How To Grab Students Attention About Saving

Show Them That Time Is Ticking

spending leaks
Spending Leaks

Jeremy’s Daily Leaks At Age 17

Non-fat Vanilla Latte ($4)

3 Otis-Spunkmeyer Cookies ($1)

Dr. Pepper ($1)

Gas for multiple trips to friends ($3)

Total ($9)

mac book
Mac Book

Roth IRA

Textbooks

Vacation

curriculum
Curriculum
  • Money Savvy Kids (K-12)
  • Moonjar (K-5)
  • FEPPP (www.feppp.org)
  • Right on the Money
organizations
Organizations
  • Local Bank or Credit Union
  • Jump$tart
  • Junior Achievement
  • FEPPP
18 000 a year
$18,000 A Year
  • $1,200 (month social security)
  • Plus 4% of a $100,000 401K
  • Retirement isn’t cheap!
secrets to investing success
Secrets To Investing Success
  • Know What You Are Investing For
  • Stay The Course (Real Loss)
  • Review Your Portfolio – Adjust To Goals
  • Know Your Risk Tolerance
types of investments
Types of Investments
  • Stocks
  • Mutual Funds
  • Bonds
stocks
Stocks
  • Partial Ownership In A Company
  • Sold On Stock Market
  • Dividends
  • Stocks Carry Risk
  • Never Put All Eggs In One Basket
    • Diversification
bonds
Bonds
  • Loaning Money To Company Or Govt. (IOU)
  • Money Is Repaid + Interest
  • Many Types Of Bonds Exist
    • Short Term, Long Term, Govt.
  • If Held Through Maturity, Investor Receives Face Value Of Bond.
  • Generally, Less Risky Than Stocks
mutual funds
Mutual Funds
  • Professionally Managed Pools Of Money
  • Many Investors
  • Contain Various Types Of Investments
  • Instant Diversification
  • Ask For Prospectus
    • Contains Fund Objectives
  • Most Require Minimum Investment
    • Some As Low As $250
what would you do
What Would You Do?

You’re 25. You have an extra $5,000 to invest.

Would you choose a stock with high risk, medium risk, low risk?

Why?

risk vs return
Risk vs Return
  • What You Need To Know:
    • All Investments Have Some Degree Of Risk
      • Interest Rate Risk
      • Inflation
      • Business Failure
diversification
Diversification
  • Never a good idea to keep all eggs in one basket.
  • Work with a financial planner to keep your investments diversified.
investment risk
Investment Risk
  • See quiz handout
  • Choose a partner & answer questions 1 & 3
  • Decide what level of risk (low, moderate, or high)
  • Decide what level of time (short, moderate, or long)
protect yourself
Protect Yourself
  • Read Prospectus Carefully
  • Make Sure Investments Are Registered
    • www.dfi.wa.gov or www.finra.org
  • Make Sure Professional Is Licensed
  • Stay Up To Speed On Common Scams
concepts students should understand
Concepts Students Should Understand
  • Again… Time Is On Their Side
  • Goals Are Achievable With A Plan
  • Diversification
  • Risk Tolerance
resources
Resources
  • Investor Education 2020
  • Investor Edu. In Your Community
  • Kiplinger Booklets
  • NASAA/DFI
resources continued
Resources Continued
  • FINRA
  • Stock Market Game
  • Money Track Videos
  • Fraud Scene Investigator
contact us
Jeremy Lushene

Education and Outreach

Phone: (360) 902-0506

Email: jlushene@dfi.wa.gov

Linda Jekel

Director of Credit Unions

Phone: (360) 902-8778

Email: LJekel@dfi.wa.gov

Contact Us!

Web Sitewww.dfi.wa.gov/financial-education/