1. Investing 101 Having Your Money Work For YOU

2. Saving vs. Investing List 2 ways you can save on one post-it and 2 ways you can invest on the other. Stick on board when finished

3. Learning Targets Calculate simple and compound interest, and rate of return Understand the factors to consider when evaluating an investment

4. Basic Principle of Investing Assets: Any item of economic value owned by an individual or corporation, which could be converted to cash.

5. Basic Principle of Investing So investing means to… Buy assets that appreciate in value.

6. Two most important factors for successful investing: Time Knowledge $

7. Would you rather have a million dollars now or a penny doubled every day for thirty days?

8. Day 1: $.01 Day 2: $.02 Day 3: $.04 Day 4: $.08 Day 5: $.16 Day 6: $.32 Day 7: $.64 Day 8: $1.28 Day 9: $2.56 Day 10: $5.12

9. Day 11: $10.24 Day 12: $20.48 Day 13: $40.96 Day 14: $81.92 Day 15: $163.84 Day 16: $327.68 Day 17: $655.36 Day 18: $1,310.72 Day 19: $2,621.44 Day 20: $5,242.88

10. Day 21: $10,485.76 Day 22: $20,971.52 Day 23: $41,943.04 Day 24: $83,386.08 Day 25: $167,772.16 Day 26: $335,544.32 Day 27: $671,088.64

11. Day 28: $1,342,177.28 Day 29: $2,684,354.56 Day 30: $5,368,709.12

13. Simple vs Compound interest Simple Interest means interest paid only on the original principle amount. ttp://www.ingnz.com/WEB/webm.nsf/Compo undInterest?OpenForm

14. Example… You deposited $100 dollars into a bank account that pays 5% interest every year. = Principle x Rate x Time You will have $105 after year one $110 after year two $115 after year three $120 after year four

15. Compound Interest The interest earned not only on the original principal, but also on all interests earned previously

16. Example You deposited $100 dollars into a bank account that pays 5% interest compounded every year. How much will you have in four years? http://www.econedlink.org/lessons/index.php?lid=603&type=educator

17. Rule of 72 Divide 72 by the interest rate of a investment to find the amount of years it takes to double your money. Example: Savings Account is paying 5% interest 72/5 = 14.4 years to double your money

18. Factors to consider when selecting an investment….

19. Return Basic Factor: Return The income produced by an investment Income or loss / Initial investment = Return % Example: Bought stock at $10 Sold stock at $15 Return = 50%

20. Return Basic Factor: Return Another Example: Bought stock @ $75 per share Sold stock @ $120 per share What is the return? Income or loss / Initial investment = Return %

21. Who wants to win some money?

22. Risk vs. Return

23. The greater the risk, the greater the return

24. Basic Characteristics Volatility The degree to which an investment’s return or value may change.

25. Risk vs. Return How much risk should one take???? Factors –Age –Income –Savings –Goals –Personal Tolerance

26. Basic Factor: Liquidity Liquidity The ease at which an investment can be converted to cash.

27. Diversification Strategy of making a variety of investments in order to reduce your exposure to risk. Don’t put all your eggs in one basket!

28. Review Compound interest is a powerful force Major factors to consider when choosing an invest include… –Return –Risk –Liquidity –Volatility –Diversification