1. F INANCIAL A SSETS & S AVINGS O PTIONS Growing Your Money

2. C OMMON S TOCK Ownership in a corporation Return 7-12% High risk Advantages: buy/sell anytime, vote for board of directors Disadvantages: prices move, no control of corporation

3. P REFERRED S TOCK Stock ownership with more claim on earnings Return 7-12% High Risk Advantages: guaranteed dividends (profit), claim on corp. assets Disadvantages: no vote

4. M UTUAL F UNDS Pooled money that is invested in multiple assets Return 6-11% Medium Risk Advantages: buy/sell anytime, diversification, little experience necessary Disadvantages: no control of companies bought

5. M ONEY M ARKET A CCOUNT Deposit account that earns interest 3-4% return Low-Medium risk Advantages: Liquid (spendable) Disadvantages: Minimum required, limited checks

6. C ORPORATE B OND Loan to a corporation (usually 10-30 years) 3-5% return Low risk Advantages: safe, you are paid 1 st Disadvantages: low earnings, cannot get money out early

7. M UNICIPAL B OND Loan to a city gov’t 4-5% return Low risk Advantages: tax free Disadvantages: low earnings

8. U.S. T REASURY N OTE OR B OND Loan to the federal gov’t 0.5 – 4.5% return Low risk Advantages: can be easily sold Disadvantages: low yield, political risk in unstable countries

9. I NDIVIDUAL R ETIREMENT A CCOUNT (IRA) Personal account used to save for retirement made up of multiple types of investments 5-8% return Variable risk Advantages: you manage options, not taxed until used Disadvantages: high maintenance

10. 401 K OR 403 B Retirement plan sponsored thru employer with a menu of investment options 5-8% return Variable risk Advantages: tax deferred, flexible, some employers include matching funds Disadvantages: limits on investment amounts, penalties for early withdraw

11. C ERTIFICATE OF D EPOSIT (CD) Loan to a bank for a specific time period (range 3 months – 5 years) 1-2% return Low risk Advantages: insured Disadvantages: cannot sell

12. C OMPOUND S AVINGS A CCOUNT Storage at and loan to a bank 1-2% return No risk Advantages: easily converted to cash Disadvantages: very low return will lose monetary value to inflation