Consumers, Savers, Investors Rub a dub dub Three Groups in this tub And who do you think they be?

What is a consumer? Someone who buys goods or services for personal use. Consumer spending is the largest portion of total spending in our economy. What do you need to be a consumer?

Money, Money, Money Income from work Income from wealth Hunka, hunka Rent, interest, etc.

Income from savings Income up, savings up Expect good things, spend more. Expect bad things, save more. Interest rates Price of “renting” your $capital to bank Price of borrowing capital from bank Rates up, save more borrow less Taxes on saving and investing

Do you want to Save? Is it safe? ROR (rate of return) Liquidity Price of “renting” your money? Liquidity Convert to cash

Savings Vehicles Savings Deposits Money Market Acct. CD’s or passbook Money Market Acct. Pension/retirmnt fnd Corporate Stock Ownership/dividend Corporate Bond IOU Mutual Funds Stocks, bonds, MM US Savings Bonds Govt Securities Bond=1yr Note=6mo.-1yr Bill=3-6mo. Life Insurance Other Investments

What is Credit? Credit allows you to obtain goods and services before you pay for them entirely. How does it work? You pay back the principal (the original amount you borrow) You pay finance charges (the interest and other fees or the price of using credit)

Consumer Credit Types of credit Home Mortgages Auto and consumer loans Charge Accounts Credit Cards

The Three C’s of Credit Character (personal qualities) Does your record show you’ve repaid in the past Capacity (ability to repay) Do you have sources of income Capital or Collateral ($$ or property) Do you have assets that secure the loan

Insurance Insurance is protection from the financial effects of emergencies. The risk of loss is shared. It gets spread out.

Are there rodent hairs in my peanut butter? Right to safety CPSC Right to information Ingredients, credit, risks Right to choose Maintain Competition Right to be heard