“Stop trying to keep up with the Jones, they are broke” Pat Foran
Write down what you know about investing. What confuses you or what questions do you have about investing?
It is not how much you make, it is how you spend and save.
Save 10% of your income.
$20/week
◦ example 1: Save each week Interest 10 years you’ll have $7.00 5% $4,720 % 9,440 % 14,160 % 18,880 % 23,600
Rate 5 yrs. 10 yrs. 15 yrs 20 yrs. 5% $ 5,525 $12,578 $21,578 $33,065 6% 5, ,276 36,786 7% 5,751 13,816 25,129 40,995 8% 5,867 14,487 27,152 45,762 9% 5,985 15,193 29,361 51,160 10% 6,105 15,937 31,772 57,257 11% 6,228 16,722 34,405 64,203 12% 6,353 17,548 37,279 75,052
savings account chequing/savings account Usually small amounts of interest
to determine about how many years it will take to double your money: 72 divided by the interest rate = Years to double investment 72 divided by a number of years to determine the Interest rate required to double your money in that period of time.
How long would it take to double your money in an account that paid 6% per year? What interest rate would double your money in five years?
Handout
When you make a financial investment, you are setting aside money with the expectation that you will receive a profit. You must invest money in order to make money. Personal investments such ◦ Bonds ◦ GICs ◦ Stocks ◦ Mutual Funds ◦ RRSPS ◦ Tax Free savings accounts
what they are and how they work Financial institution pays a fixed amount of interest for a fixed amount of money for a fixed amount of time, usually for longer than a year Most institutions require a larger minimum deposit than for a term deposit
benefits No risk Simple No fees Offers higher interest rates than a savings account and term deposit
trade-offs Money “locked in” for fixed and longer term, compared to term deposit Withdrawal penalty if cashed before expiration date (penalty can be higher than the interest earned) Note: GICs mature if the holder dies before the maturity date.
Save up to $5500 annually and it will grow tax free. You can take the money out at any time without paying a penalty. You do not receive a tax deduction You do not pay a tax penalty Must be 18 and over
what they are and how they work Plans that help individuals set aside money to be used after they retire. Income tax not immediately due on money put into a retirement account, or on the interest it makes.
Income tax paid when money is withdrawn. Penalty charges apply if money is withdrawn before the maturity date, except under certain circumstances. Income after retirement is usually lower, so tax rate is lower
Handout
What are your goals? What are you hoping to achieve from your investments? What is your target rate of return – that is, what are you hoping to earn from your investments? What is your level of investor knowledge and experience with investing?
What is your “risk tolerance?” What level of risk are you are comfortable with? How much do you have to invest? What is your “time horizon” – at what points will you need money – and how much will you need?
each year billions of dollars are lost to fraudulent investments. Some of the most common include: Don’t write the following. Illegal pyramids, insider trading, and unlicensed investment brokers High-risk “penny” stocks and fraudulent securities Fraudulent franchises and business opportunities
/earl-jones-in-trust /earl-jones-in-trust
1. What are the different things people can do with their money? 2. Why is saving important? 3. What are some ways to try and save money? 4. What is the purpose of investing? 5. Why might you choose to work with an advisor?
6. What factors can affect a person’s comfort level with risk? 7. Why is investing important to the economy? 8. What are some key criteria to consider when making decisions about money?
The Johnson family includes Marv (age 34), Gail (33), Andrew (8), and Molly (4). What are some investment goals that might be appropriate for this family? /2 What types of investments might be used to achieve these goals? /2
What type of investment or savings option would be the best for the following: High school student College/University student University graduate, first job, income - $35000/per year 50 year old, full time job – $65000/year, would like to retire in 10 years
1. How long would it take to double your money in an account that paid 6 percent per year? 2. What interest rate would double your money in five years?
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