1. Investment Unit – Part Deux
Specific Investments to Slowly Increase Your Wealth

2. The Three Types of Investments
Ownership Investments
Lending Investments
Cash Equivalents

3. Ownership Investments
Ownership: Purchase of an Asset, expecting its value to appreciate over time
A) Stocks
Also known as an equity or a share, a stock gives you a stake in a company and its profits.
Basically, you get partial ownership of a public company.
B) Real Estate
C) Precious Objects
Precious metals, art, collectables, etc.
Intention is to resell them for a profit.
D) Business
Putting money or time toward starting your own business—a product or service meant to earn a profit

4. Lending Investments
Lending: Buying a debt that's expected to be repaid.
Generally low-risk, low-reward investments.
Thought to be a safer investment, but their return is usually low.
A) Bonds: umbrella term for any type of debt investment.
When you buy a bond, you loan money to an entity (a corporation or the government, for example)
They pay you back over a set period of time with a (usually) fixed interest rate
B) CDs: A CD, or certificate of deposit, is a promissory note issued by a bank in exchange for your money
You must commit to leaving the $ in account for a set period.
In return, they'll offer a higher interest rate based on how long you invest in them.

5. Cash Equivalents Assets that can be immediately converted to cash
A) Savings Account
You are lending your bank money, but you can take it out at any time
With flexibility, the bank pays you less interest
B) Money Market
Savings account with higher interest rate
Usually will require a higher minimum balance to trigger that higher interest rate

6. Ways to Invest in Stock Mutual Funds
An investment company picks a collection of similar assets for you.
A group of stocks or a group of bonds.
Fund can be even more specific—there are funds made up of all international stocks, for example.
In return for their managing your investments, you'll pay a fee, or an "expense ratio."
More convenient investment
Usually provide a better return than anything you would pick on your own.
Index Funds: A type of mutual fund meant to mirror the return of a specific market, like the S&P 500, or Dow Jones
Hedge Fund:
Like mutual funds, with a few very important differences.
Not regulated by the U.S. Security and Exchange Commission (SEC).
Riskier than regular mutual funds b/c can include a broader range of investments.
Often use borrowed money to invest