Intro to Investing

Pop Quiz Get out a half sheet of paper for your journal. When I reveal the questions, you will have 7 minutes. What is the difference between gross and net income? Which is which? Describe the difference between a savings and a checking account Define the term “scarcity” What does the Fed control (generally) and what 3 tools does it have to do its job? You leave 20 dollars at a bank with 2% annual interest. How much money will you have in 4 years? How long does it take to have 40 dollars in the bank?

Pop Quiz Swap papers with someone sitting next to you. Grade their paper and sign your name at the bottom. Net- amount you earn after taxes/costs. Gross- Total before costs Money in a checking account is meant to be spent. Not so in a savings account Limited resources in a world of unlimited wants Influence the money supply. Tools: interest rates, reserve requirement, and treasury bonds A.) 21.65 B.)36 years When the paper gets to you, tally the questions you got WRONG. That will let me see how we’re doing as a class and what we need to spend a little more time on.

Managing a Checking Account Checks- documents that transfer money out of a checking account, either to cash or to another account Reconciliation- the act of making sure that your records match the bank Why should we track our expenses? Debit Cards- a card that allows for the electronic transfer of money out of a checking account

Debit v. Credit Cards Credit Card- a card issued by a bank or institution that allows consumers to buy goods on credit Debit cards are buying things with money you already have Credit cards are buying things with money you don’t have https://www.youtube.com/watch?v=84FOUfw-qY8

Investing!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Terms 4 Days On the front side of your note sheet (labelled “Practice”), try to match each term to its definition. You’ve most likely heard many of these terms before, just in everyday life. You’ve got 6 minutes, GO!

Terms 4 Days Now, on the back side of your note sheet (conveniently labelled “Notes”), write the definition for each of the terms. Stock Stock Exchange Shareholder

Terms 4 Days Portfolio Stock Broker Public Corporation Private Corporation Initial Public Offering (IPO) Sector

How does making money in the stock market work?

Story Time The Story: Fred and Barney both decide that they want to invest in the stock market. Barney buys stock in McDonald’s, JCW’s, Wendy’s and Five Guys’. Fred buys stock in Five Guys’, Twitter, and Tyco Toys (the company that produces the hit classic, Tickle Me Elmo). In a cruel twist of fate, mad cow disease returns and runs rampant, devastating half the cow population. Who’s portfolio loses the most value? What went wrong?

Diversification Diversification- Having many different types of investments in your portfolio to minimize risk. Invest in multiple “sectors” Should we put all our investment money in the stock market?

Risk v. Reward High Risk v. Low Risk stocks Penny stocks- low cost stocks that are highly variable in price High risk v. low risk investing

What Are Some Brands We’re Familiar With? The Basics: The Luxuries: The Entertainment:

The Stock Market Game! Over the next month, you will be in charge of your own investment portfolio, using the website howthemarketworks.com. This is a simulation that uses fake money to invest in the stock market, at real prices. You can see how much money you would have made if you invested this way in real life. At the end of the game, the person with the most money is the winner!

Stock Market Game How to join the contest  Register and Join:  Register (use your name in your login, somehow) to howthemarketworks.com and once you log-in, you can go to Join Contests, and look up the contest: Mr Bird AFHS Fin Lit via the search bar. The password is: mrbirdafhs

How “How the Market Works” Works Researching Buying Selling

Stock Market Game Look at different stocks that you find interesting, that you may want to invest in. Look at their history and expected performance. We’ll go over investing strategies in a future class, so you may want to save some of your money until you have a better idea of what to do with it!