1. Saving and Investing
Types of Vehicles

2. Introduction Would you rather be an owner or lender?
owner: own a piece of the business
lender: lend money to business or gov’t and receive interest
What kinds of investments do you have?

4. Types of Savings/Investments
Demand Deposits
Can withdraw money when you want with no penalty
Time Deposits
Money must stay in investment for a specified period of time

5. Types of Savings/Investments
Savings Account (demand deposit)
Low interest
Low risk because insured
High liquidity - funds are easily accessible
Certificates of Deposit (CDs) (time deposit)
Time deposit (fixed rate paid for certain time)
Lower interest but higher than U.S. Savings Bond or Savings Account because of time commitment
Penalty if cashed before expiration date(may be higher than the interest earned)

6. Types of Savings/Investments
U.S. Savings Bonds
Lending your money to the government
Low interest but usually higher than savings accounts
Low risk
Long period of time—designed to be held up to 30 years
Penalties if cashed before maturity

7. Types of Savings/Investments
Money Market Deposit Accounts (MMDAs)
Similar to checking accounts—offered by banks
Low interest but usually higher than savings accounts
Low risk because insured
Limit number of checks written
Balances required tend to be higher
Money Market Mutual Funds (MMMFs)
Similar to MMDAs but offered by mutual fund companies
Higher interest than MMDAs because not insured
Low risk but not guaranteed or insured

8. Types of Savings/Investments
Others
Stocks (ownership of company)
bonds (U.S, corporate and municipal)
Loans not ownership
“junk bonds” (“iffy” businesses)
mutual funds (pools investors’ money)
real estate
collectibles (antiques, sports cards, etc.)
futures contracts

9. Basic Investment Principles
When is it appropriate to begin an investment program?
income exceeds your spending
savings is enough to cover emergencies and to allow you to take advantage of unexpected opportunities
assets are adequately protected against personal or financial loss through appropriate insurance coverage
Key to Successful Investing
persistent and consistent saving (uninterrupted)

10. Review
Types of Savings/Investments

11. Assignment Asset Allocation
Go to
Read the pages explaining Asset Allocation
Take quiz and show Mr. Bauer your score

12. Assignments Smart Banking and Saving Basics
Go to
Read the pages explaining “Smart banking and saving basics”
Take quiz and show Mr. Bauer your score

13. Assignments Investing Your Money Basics
Go to
Read pages explaining Investing your money basics
Take quiz at end and show Mr. Bauer your score