1. Finance 101

2. Cash Checking accounts – NOW accounts Money Market accounts CDs

3. Bonds – Fixed Income Savings Bonds Corporate Bonds –A, AA, C – can default –Ownership in companies Municipal Bonds –City/state/government –Funds schools/projects Treasury Bonds –Full faith & credit of US Government

4. Bonds Principal remains the same –Dividends are paid – quarterly –$5,000 @ 5% - 3 years $5,000 purchase price $62.50 per quarter $5,000 @ maturity Treasury –Purchased at discount –$5,000 @ 5% - 3 years 4,250 purchase price $5,000 @ maturity

5. Stocks – Growth Individual stocks – ownership in companies –Proctor & Gamble –Microsoft Mutual funds – ability to diversify holdings –Fidelity – Peter Lynch/Magellan –Morningstar rating REITS ( Real estate investment trust) –Invest in real estate for minimum amounts

6. Stocks Dow Jones – 30 companies S&P 500 – 500 large cap Nasdaq – 5,000 –Value can increase/decrease –Dividends paid quarterly –High/low –Long term investment

7. US Stock Market History

8. Proctor & Gamble

9. Other financial terms IRA – can open even while in 401(k) 401 (k) – payroll deduction/company match. Estate – value of all you own when you pass. Will – road map for disposition of assets upon death. Trust – various uses during life and after.

10. Credit/Loans Credit cards –Interest rates –Minimum payment Auto loans –Installment – e.g. $7,000 x 8.75% for 5 years = $173 per month –Rates & terms determined if new car vs old car Mortgages –Similar to installment loans – e.g. $100,000 @ 6.25% for 30 years = $615 per month Home Equity loans –Lines of credit and installment loans Student loans

11. Credit,Capital,Capacity Credit –Credit history – important all through life! –Determines rate Capital –Other assets –Value of collateral – if offered Capacity –Cash flow analysis – ability to repay

12. Cash flow analysis Example of loan –$10,000 @ 8.75% for 4 years Cash flow analysis –Income Annual salary = $50,000/12$4,166.00 Investment income = $5,000 stock x 2% 100.00 TOTAL MONTHLY INCOME$4,266.00 –Expenses Rent$1,000.00 Credit Card debt ($1,000 x 3.5%) 35.00 Other debt – student loans etc. 500.00 TOTAL MONTHLY DEBT$1,535.00 DEBT/INCOME = 28% ACCEPTABLE RATIO THIS EXAMPLE = $4,266/$1,535 = 35%

13. BUDGET Total gross income4,000.00 Total net income2,800.00 Rent1,000.00 Food400.00 Insurance100.00 Car loan350.00 Credit card35.00 Student loan500.00 Gas150.00 Miscellaneous150.00 Total monthly expenses2,685.00 Net - savings115.00

14. Your financial health Take control Read more about finances Monitor your own accounts – (identity theft) Seek advice Keep to budget Plan for future – 401(k) A MUST HAVE

15. Word of Wisdom The only way not to think about money is to have a great deal of it….Edith Wharton Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy…. Groucho Marx If you would be wealthy, think of saving as well as getting….Benjamin Franklin We make a living by what we get, we make a life by what we give….Sir Winston Churchill