What is an investment? Create a short definition.

What is an investment? Create a short definition. http://www.investopedia.com/terms/i/investment.asp Create a list of 5 examples that fit the definition.

Investing for the Future Essential Questions: How can risk, reward, and liquidity be used to evaluate potential investments?

https://apps.pnc.com/rates/servlet/DepositRatesSearch Savings Account Pros: Very safe (insured by the FDIC), Very liquid (can make withdrawals at ATMs) Cons: Low rate of return (usually less than the rate of inflation) https://apps.pnc.com/rates/servlet/DepositRatesSearch

Certificate of Deposit Pros: Very safe (insured by the FDIC), Higher rate of return than a savings account Cons: Many investments offer a higher rate of return, Not very liquid (must pay a penalty for early withdrawal) https://apps.pnc.com/rates/servlet/DepositRatesSearch

Bonds Pros: Relatively safe (government bonds are safer than corporate bonds), Better rate of return than CDs and savings accounts Cons: Not very liquid, Stocks and mutual funds offer a higher rate of return https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

Mutual Fund Pros: Relatively high rate of return, Less risky than stocks (due to diversification of investments), Relatively liquid Cons: Stocks offer the possibility of greater returns http://online.wsj.com/mdc/public/page/2_3048-usmfunds_A-usmfunds.html

Stocks Pros: Possibility of very large returns, Relatively liquid Cons: Can be very risky

Retirement Accounts Set up for individuals by a financial planner IRA 401(k) Set up for individuals by a financial planner Set up by your employer. Money is deducted from your paycheck & your employer may offer “matching funds” *Traditional IRA and 401(k) plans offer tax-deferred investing. Roth IRA and 401(k) plans allow you to pay taxes now but make tax-free withdrawals at age 59 ½.

Retirement Accounts Set up for individuals by a financial planner IRA 401(k) Set up for individuals by a financial planner May be composed of stocks, bonds, mutual funds, etc. (anything that your financial planner is certified to buy/sell) Set up by your employer. Money is deducted from your paycheck & your employer may offer “matching funds” May be composed of investment options offered by the employer. *Traditional IRA and 401(k) plans offer tax-deferred investing. Roth IRA and 401(k) plans allow you to pay taxes now but make tax-free withdrawals at age 59 ½.

Retirement Accounts Set up for individuals by a financial planner IRA 401(k) Set up for individuals by a financial planner May be composed of stocks, bonds, mutual funds, etc. (anything that your financial planner is certified to buy/sell) In 2016, max. $5,500 can be contributed to your account (annual limit) Set up by your employer. Money is deducted from your paycheck & your employer may offer “matching funds” May be composed of investment options offered by the employer. In 2016, max. $18,000 can be contributed to your account (annual limit) *Traditional IRA and 401(k) plans offer tax-deferred investing. Roth IRA and 401(k) plans allow you to pay taxes now but make tax-free withdrawals at age 59 ½.