1. Investing & Housing Let your money make money.

2. Risk v. Return  All investments have risk & return  Undiversifiable Risk – Uncontrollable  Diversifiable Risk – Specific to each company  More risk = more return  Portfolio diversification reduces risk

3. Investing in Stocks  Investment with most risk  Reduce risk by buying mutual fund  Stocks traded through stockbrokers – online or person  Your goals affect your risk & return  Patience is the key

4. Investing in Bonds  Loans to corporations  Less risky than stocks  Bought & sold through broker  Used to raise capital  Holders receive interest payments & repayment of loan

5.  Governments sell municipal bonds  Federal government sells treasury instruments  Each has different interest rates & maturity dates  T.I.s have lower risk & return Investing in Bonds

6. Individual Retirement Accounts  Considered investments & savings  Financial advisor selects stocks & bonds to invest in  Offered by employers & banks  Traditional – Yearly contributions, taxed on withdrawal  Roth – Taxes taken out on deposit

7. Renting a Home  How much should you pay?  What are the other expenses?  Location & Amenities  What to save for  Read lease carefully  Choose roommates  Rights & Responsibilities

8. Good & Bad of Renting  Benefits  Money saved can be invested  You don’t have to do maintenance  Negatives  Renting is only borrowing  Rent can be raised when lease is renewed

9. Buying a Home  Good investment, but big commitment  Monthly mortgage should be 30% of monthly income

10. Good & Bad of Buying  Benefits  Good investment – value increases  Builds equity, can be used to borrow money  Tax deductions  You get to choose what changes to make  Negatives  Huge financial responsibility  Lots of upkeep  Home Owners’ Association