INVESTING
Business Management: Learning Targets Understanding the importance Investing Building Wealth will have in both my professional (business) and personal life.
WHY INVEST? Potential source of income Prepare for major purchase Security Blanket T.V.M.
Potential Source of Income Earn interest off investment Dividends - reinvest or cash out Sell investment for profit Use earnings as primary or secondary income
Prepare for Major Purchase Buy home Buy property Buy car Pay for college Pay for a wedding Start a family
Security Blanket Supplement Social Security Back-up to company paid benefits Always have more money than you need Fact – if the economy stays on its current path there will not be any Social Security benefits available for your generation.
T.V.M TIME VALUE of MONEY Start early Doesn’t have to be large amount Invest/Deposit often Allows your money to grow by utilizing interest to increase your investment. Tip - Invest often…any amount!
Types of Investments Real Estate Stock Market Stocks – Mutual Funds – Bonds Banking Certificate of Deposits (CD’s) Money Market Accounts Savings Accounts Government Securities Treasury Bills & Notes Bonds
Property Land or Acreage Public or commercial. Always a need for land. Rentals Houses 2-Families Condos /Apartments
Stock Market Investments Stocks Mutual Funds Bonds Commodities
Investment Risk High Risk Medium Risk Low Risk Remember no investment is guaranteed to make you money. Greater the risk, greater reward!
High Risk - Investments FUTURES Real Estate Certain types of Stocks Certain types of Mutual Funds Certain types of Bonds
Medium Risk - Investments Real Estate Certain types of Stocks Certain types of Mutual Funds Certain types of Bonds
Low Risk - Investments Govt. Securities Treasury Bills & Notes Bonds Mutual Funds Savings Account Money Markets CD’s FYI – Takes longer to make money but almost a sure thing!
Key to successful Investing Diversification Invest in more than one type of investment that way you can balance your portfolio… “don’t have all your eggs in one basket” Scenario: You own stock in FTB, GE, PG. FTB goes down, GE stays the same, and PG goes up. By being diversified, when FTB went down, you did not lower your overall wealth.
INVESTMENT GLOSSARY pt. 1 Annual Report Asset Bear Market Blue Chip Stock Bond Broker (Stock Broker) Bull Market Capital Appreciation Capital Gain/Loss Capital Gain Tax Certificate of Deposit Common Stock Coupon CUSIP Number
FRAYER MODEL DIAGRAM
Continued… OVAL – write the concept word or term. 1 st Box – write the definition of the word…needs to be clear and easily understood by all. 2 nd Box – list the characteristics of the word. 3 rd Box – list examples of the word. 4 th Box – list non-examples of the word.
Example: A mammal is known as a warm blooded creature that grows hair or fur on its body. Also, females should be able to secrete milk to feed to her young, after birth.
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COMING SOON What is Stock? Types of Stocks? What are Mutual Funds? How do you Invest? The S.M.G. (Stock Market Game)