Team 7 Personal Investment Michael Dellosa Andrew Nimrod

Objectives Scenario Stocks Roth IRA Summary & Assumptions References

Scenario You are a 23 year old college graduate that has just started a job paying $55,000 dollars a year and want to invest 10% of your yearly salary in the market,but is not sure on which route to go. So you decide to look at investing your money into stocks or a Roth IRA for a 10 year period in hopes that you will be able to make enough for a nice down payment on a house.

Stocks Basics –A stock is a share in the ownership of a company. –Stock represents a claim on the company's assets and earnings. –Investment in stocks has historically had an average return of around 10%-12% –Two types of stock common and preferred

Stock Analysis

Stock Sensitivity

Stock Sensitivity Cont.

Roth IRA Roth IRA Basics –Can invest up to $4000 a year by using an after tax paycheck –Collect tax free compound interest on growth on whatever you decide to invest in Limitation in this project –First 5 years contributions will not be penalized, but the last 5 years will be penalized 10%

Roth IRA Analysis

Roth IRA Sensitivity

Summary Assumptions Market value always went up Constant salary increase Same employer for the 10 yr. period

References htm 3. /aboutira.shtml.cvsr?banner= &immid=00045 &psite=google&crtype=search&kw=Roth_IRA 4.