1. Presented by Glendale Community Library Instructors: Chuck Milliner and Annette Fisher

2. April 25 Preparing to Invest May 2Key Investment Concepts May 9 Bank Products and US Treasury Securities May 16 Common Types of Investments, and Retirement Savings Vehicles

3. May 23 Choosing the Right Investments May 30 Managing Investment Risk June 6 Evaluating Performance June 14 Investment Professionals and Safeguarding Your Investments

4.  Introduction: Savings and Investing  Create a Budget – and Pay Yourself  Set Investment Goals  Establish an Emergency Fund  Choose Investments Wisely  Practice Good Habits

5. 5  Savings: Money held in a short-term cash assets Money used for emergencies and specific purchases  Investing : Money used to increase net worth and achieve long-term financial goals

6. 6  Kept in safe, low-risk vehicles  Liquid  Yield low returns  Used for short- term goals  Involve risk  Value can go up and down in short time periods  Offer potential for growth  Used for mid-& long- term goals

7.  Basic savings accounts.  Interest earning checking accounts.  Money market accounts and funds. Money market accounts are covered by the FDIC, but money market funds are not.  Certificates of deposit. Require you to leave your money on deposit for a set time period, otherwise you incur penalties. 5-13

8. 8  How much should I save? Try to save 10% of every paycheck  10% of gross is ideal  10% of net is great  Starting with something is very good  Start with $1, $5, $10, or $20 per pay period

9. John has saved $2,500 and has earned the following income during the last five years:

10.  YEAR % YEAR % YEAR %  1980 10.0 1990 7.0 2000 2.3  1981 10.9 1991 7.3 2001 1.8  1982 11.2 1992 7.7 2002 2.4  1983 9.0 1993 5.8 2003 2.1  1984 10.8 1994 4.8 2004 1.8  1985 9.0 1995 4.6 2005 -0.4  1986 8.2 1996 4.0 2006 -1.0  1987 7.0 1997 3.6 2007 0.0  1988 7.3 1998 4.3  1989 7.1 1999 2.4  Source: US Department of Commerce, 2008 http://www.bea.gov/newsreleases/national/pi/2008/pdf/pi0308.pdf

11. 11 Have money automatically deducted Reduce withholding Only spend greenbacks Earmark percentage of gifts, bonuses, etc Save “excess” expense account money Have a garage sale Save your raise

13.  Named Rate versus annual percentage yield.

14.  You have $1,000 and want to know how long it will take to double your money. If you earn 6% interest each year on your account, you divide 72 by 6 72 /6 = 12 years to double your money

15. 15 Assume $2,000 annual contribution invested with pre-tax dollars; earnings tax-deferred; accumulated to age 65 EarningsAge 20Age 50 6%$ 451,000$49,300 7%$ 612,000$53,800 8%$ 835,000$58,600 9%$1,150,000$64,000 10%$1,580,000$69,900 Contributions$ 90,000$30,000

16.  Set up a Budget based on your Income and Expenses.  Track Expenses for a month to see what you spend.  Tools – Excel, Quicken, Notebook.  Pay off credit cards and other high interest debt  Set up Emergency Fund

17.  Why?  How much?  Where to keep it?  Laddering – Roll over CDs

18. 18  What are your goals and what do they cost?  When do you want to achieve each goal?  How much risk can you tolerate?

19.  Own home  College for children or grandchildren  Retire comfortably  Others?

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21.  Chose different investment tools for different goals – home down payment versus retirement account  Diversify  Research, know fees upfront  Investment Professional or on your own.  Tracking and evaluating investments  Modify when necessary

22.  Develop Budget and stick to it  Pay credit cards bills in full  Save, save, save  Include investment amounts in monthly budget  Reinvest interest and dividends  Take advantage of employer retirement  Review investment statements regularly