1. Ms. Lewis Personal Finance

2. General Overview There are no sure things when investing Any investment has a certain degree of risk Most securities are not insured by the federal government

3. What is investing? To put money into business, real estate, stocks, bonds, etc. for the purpose of obtaining an income or profit

4. Vehicles for investment Mutual funds Traditional IRAs Roth IRAs Savings bonds Municipal bonds Stocks Certificates of deposit

5. Mutual Fund An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

6. Traditional IRA Available to everyone: No income restrictions Can start to withdraw funds from this account at age 55 ½ Any withdraws before this age and you are subject to a 10% penalty Funds in a traditional IRA are tax deductible Ex: If you make $50,000/year and put $2,000 in your IRA, you will only be taxed on $48,000

7. Roth IRA Contributions are not tax deductible Available only to single-filers making $95,000/year or married couple making $150,000/year Contributions can be withdrawn at any time without incurring a penalty

8. Savings bond A bond is a fancy IOU When the government spends more than it collects in taxes, they sell bonds Bonds are purchased and mature over time Savings bonds are considered to be one of the safest investments because they are backed by the federal government

9. Municipal Bond Debt obligations issued by states, cities, counties When purchase a municipal bond, you are lending money to the government, who then promise to pay you back in interest The money made by municipal bonds are used to build: Schools Highways Hospitals Sewer systems

10. Certificate of Deposit (CD) A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years

11. When will you get your investment profits? Some investments pay out earnings on a regular basis (quarterly, monthly, annual) Others pay at the end of an investment period Some investments require a period of maturation

12. What else should you consider when thinking about investing? Tax ramifications: Think about investments that offer incentives for saving Some contributions are tax deductible Contributions that may not be taxed

13. Think about diversifying Diversify your portfolio Put your money in several investment vehicles This can protect you from risk While one investment may be doing poorly, another may make up those losses