SAVING AND INVESTMENT BASICS

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Presentation transcript:

SAVING AND INVESTMENT BASICS Savings-storing money for future use Investing-using savings to earn money The growth of savings Interest-money you receive for letting others use your money Compound interest-amount saved plus interest

SAVING AND INVESTMENT CHOICES Savings plans Savings account Certificate of deposit Money market account Securities Stock investments Bond investments Mutual funds Alternative investments Real estate Commodities Collectibles

EVALUATING SAVINGS AND INVESTMENTS Safety and risk Potential return Yield-% of money earned Liquidity-how easy an investment can be changed into cash Taxes

INVESTMENT PYRAMID

DEFINE KEY TERMS preferred stock common stock stockbroker stock exchange market value

TYPES OF STOCK Preferred stock Common stock

STOCK TRANSACTIONS Using a stockbroker Online investing Stock exchanges Changing stock values

STOCK MARKET PRICE REPORT

STOCK SELECTION Stock information sources Economic factors Inflation Interest rates Consumer spending Employment Company factors

GOVERNMENT BONDS Municipal bonds U.S. savings bonds Other federal securities Federal notes (T-notes) Treasury bills (T-bills) Treasury bonds (T-bonds)

CORPORATE BONDS Bond components Bond values

MUTUAL FUNDS A mutual fund is an investment fund set up and managed by companies that receive money from many investors.

TYPES OF MUTUAL FUNDS Aggressive-growth stock funds Income funds International funds Sector funds Bond funds Balanced funds

DEFINE KEY TERMS real estate mortgage equity assessed value

SELECTING HOUSING Renting your residence Owning a mobile home Buying a home Services of real estate agents Other real estate professionals Buying a condominium

BENEFITS OF HOME OWNERSHIP Tax benefits Increased equity Pride of ownership

COSTS OF HOME OWNERSHIP Property taxes Interest payments Property insurance Maintenance

DEFINE KEY TERMS commodities futures contract collectibles