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I NVEST Y OURSELF ! An Investor Education Program for High School Students Funded by the Investor Protection Trust.

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Presentation on theme: "I NVEST Y OURSELF ! An Investor Education Program for High School Students Funded by the Investor Protection Trust."— Presentation transcript:

1 I NVEST Y OURSELF ! An Investor Education Program for High School Students Funded by the Investor Protection Trust

2 O BJECTIVES FOR T ODAY Provide tools and information for you to use to make good decisions for your financial future Important concepts – self-control and delayed gratification Learn investing terms so that you can participate in smart investing

3 B UILDING W EALTH IS A SSET B UILDING Technical Culinary Artistic Musical Mechanical Athletic Literary Inventive Mathematical Leadership Entrepreneurial Fashion Public Speaking

4 E DUCATION ! E XPERIENCE ! N ETWORKS ! College Teams Clubs Military Volunteer Mentors Trade School Summer Jobs Beta/FBLA Apprenticeships Internships Community Online classes Travel Virtual

5 S ETTING F INANCIAL G OALS Its like reading a map … Know where you are – Personal balance sheet Know where youre going – Exciting real goals! Short-term goals = 2 or 3 years Medium-term goals = 5 to 10 years Long-term goals = More than 10 years

6 S.M.A.R.T. O BJECTIVES Financial goals should be: S – Specific M – Measurable A – Attainable R – Realistic T – Timeline (specific time frame)

7 D ECISION M AKING M ODEL - PACED Define the Problem List your Alternatives State your Criteria Evaluate your alternatives Make a Decision

8 B ASICS OF S AVING AND I NVESTING – P ART 1 What is the difference between saving and investing? Five Keys to Investing Success 1. Pay yourself first (make investing a habit) 2. Set exciting goals 3. Dont take unnecessary risks 4. Keep time on your side (time value of money) 5. Diversify Stocks BondsMutual Funds Savings & CDs

9 T IME V ALUE OF M ONEY NOTE: Assumes a 9% fixed rate of return, compounded monthly. All interest is left in the account to be compounded.

10 T IME V ALUE OF M ONEY (C ONTINUED ) … if she continues each year …

11 … if he continues each year …

12 B ASICS OF S AVING AND I NVESTING – P ART 2 Market myths about investment planning Risk and reward go hand-in-hand … Investment products Stocks Bonds Mutual funds Retirement accounts

13 P YRAMID OF I NVESTMENT R ISK High Risk Medium Risk Low Risk Futures Stocks Bonds Mutual Funds Treasury Bills Money Market Funds Certificates of Deposit Savings AccountsCash

14 K ENTUCKY S B LUE C HIP 25 Look at your name tag – you are a stock! Which companies do you know? Which stocks would you like to hold?

15 M UTUAL F UND A CTIVITY Note the color on your name tag Fund Manager controls the yarn in their color Stocks of that color form a circle around their manager Pass the yarn back and forth between Stock, Manager, Stock, Manager, etc. until you form a web Stop and Hold!!!

16 M UTUAL F UNDS A Mutual Fund is - a pool of $$$$$ - invested by a manager - the goal is to increase the value of each share of the fund for its investors Why more American invest through mutual funds than directly in the stock, bond or money markets? Professional management Diversification mix and match Liquidity Investment objective Always consider: Cost, Performance and Convenience

17 R ULE OF 72 Use the Rule of 72 to calculate how long it will take your money to double at a given interest rate if you reinvest the earnings 72 Percentage rate of return = Number of years needed to double your money Examples: At 8% interest, it would take 9 years for the money to double (72 8 = 9) At 10% interest, it would take 7.2 years for the money to double (72 10 = 7.2)

18 P RACTICE THE R ULE OF 72 How long would it take the following investments to double? InvestmentRate of ReturnYears to Double CD3% Common Stock10% Money Market1.7% U.S. Treasury Note2.66%

19 I NTEREST C AN W ORK FOR Y OU Save $60/month for 40 years Assume 8% interest rate Principal Invested = $28,800 Interest Earned = $182,058 Final Amount Saved = $210,858

20 I NTEREST C AN W ORK AGAINST Y OU Carry a balance of $3,000 on a credit card Assume interest rate (APR) of 19.8% Make minimum payment of 2% each month Time to Pay it Off = 32 years Interest Paid = $9,483

21 R EVIEW Three Rules for Building Wealth: 1. Start early Give money time to grow 2. Buy and hold Keep your money invested 3. Diversify Dont put all your eggs in one basket

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23 D OING I T R IGHT MoneyTrack Video Clip – Damon Williams

24 T WEET ! Come up with one best tip you learned today Create a poster displaying the tip as a Tweet you might see on Twitter Tweet Tips: 140 characters or less (counting spaces and punctuation) Answers the question Whats happening? Use # (hash tag) before words you want to mark as keywords – they become search topics/categories (reply or mention) with a username to recognize someone else involved with your tweet topic


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