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NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Investing: Making Money Work for You Investing: Making Money.

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Presentation on theme: "NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Investing: Making Money Work for You Investing: Making Money."— Presentation transcript:

1 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Investing: Making Money Work for You Investing: Making Money Work for You NORTH DAKOTA PERSONAL FINANCE EDUCATION

2 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Savings and Investments Unique Savings Features Unique Investment Features Common Features Common Features What are some features common to both investments and savings?

3 Rule of Interest Rate = Years Needed to Double Investment 72 Interest Rate Required = Years Needed to Double Investment

4 Rule of 72: $10,000 Invested Year3%6%12% INTEREST RATE $20,000$40,000$160,000 $20,000 $40,000 $80,000 $20,000

5 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Financial Planning Pyramid Penny Stock Com- modities Collectibles Speculative Stock / Bonds / Mutual Funds Real Estate Blue-Chip Common Stock Growth Mutual Funds High-Grade Convertible Bonds High-Grade Preferred Stock Balanced Mutual Funds High-Grade Corporate Bonds or Mutual Funds High-Grade Municipal Bonds or Mutual Funds Money Market Accounts or Mutual Funds Certificates of Deposit U.S. Savings Bonds Insured Savings / Checking Accounts Treasury Issues Highest Risk Highest Earnings Lower Risk Lower Earnings

6 Interest Rate 3% 24 Yrs. $800 4% 6% 8% 12% 6 Yrs.9 Yrs.12 Yrs.18 Yrs. $400 $200 Impact of Higher Returns on Savings and Investments Rule of 72: The approximate frequency with which $100 doubles at specific interest rates 21

7 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Investment Options

8 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Options Include Savings accounts U.S. savings bonds Certificates of deposit Money market deposit accounts

9 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Options Include Money market mutual funds Corporate and government bonds Growth investments

10 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Options Include Stocks Real estate Collectibles Mutual funds

11 Dollar Cost Averaging Amount Invested Share Price ($) Shares Purchased $1,000$2050 Amount Invested Share Price ($) Shares Purchased $100$ $100 $19.50 $19.25 $19.75 $19.20 $18.90 $18.00 $18.60 $ $1,000$2050$19.39*51.66 $100$ One-time InvestmentDollar-cost Averaging $1,000 * Average Share Price 4321

12 NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Ready Set Go


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