INVESTMENT TERMS.

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Presentation transcript:

INVESTMENT TERMS

“SECRET OF BECOMING RICH” (the sure way to acquire financial wealth): Save at least 10% of your income and never spend it, but invest it. Never spend the principal, but accumulate enough wealth to live off the interest/investment income. $100 a month saved for 45 years @ 14% compounded interest = $1,228,800. Anyone can become a millionaire.

Compound Interest: Earning interest on the previous interest Compound Interest: Earning interest on the previous interest. The interest must be left in the investment. Risk: The chance of losing invested money. Rate of Return: Determined by the interest rate and the amount of the investment. Liquidity: How easily the investment can be turned into cash. Term: The time after which the interest is paid or the investment no longer pays interest.

If you had $10,000 to invest, which of the options above would you choose, or would you divide the money into several investments? Approximately $2000 in low risk, $4000 in medium risk, and $2000 in higher risk is a good choice for a young person. The older you get, the less risk you should take. It would be imprudent to put all $10,000 into one investment, especially a high risk one.

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

INVESTING FINANCIAL RESOURCES

Internal vs. External Forces – What Drives Spending?