MoneyWi$e: Saving to Build Wealth Saving to Build Wealth MoneyWi$e A joint financial education project of Consumer Action and Capital One.

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Presentation transcript:

MoneyWi$e: Saving to Build Wealth Saving to Build Wealth MoneyWi$e A joint financial education project of Consumer Action and Capital One

MoneyWi$e: Saving to Build Wealth Topics we will cover: Building an emergency savings fund. Setting personal financial goals. How interest-bearing accounts help your money grow. Balancing the risks and rewards of investing. Accounts that help you save for retirement and education.

MoneyWi$e: Saving to Build Wealth Your expectations What do you hope to get out of this seminar?

MoneyWi$e: Saving to Build Wealth Getting started Building wealth is like building a brick wall.

MoneyWi$e: Saving to Build Wealth Needs and wants Needs are things you use or require every day. Wants are things you would love to have but can live without.

MoneyWi$e: Saving to Build Wealth Barriers to saving Credit cards Debt payments Ads for new products such as cars, electronics and clothing.

MoneyWi$e: Saving to Build Wealth Emergency savings You can’t build wealth overnight. A good first goal is a savings account for emergencies.

MoneyWi$e: Saving to Build Wealth Auto-pilot savings Set up automatic deposits to a savings account.

MoneyWi$e: Saving to Build Wealth Easy money Money that is easily available is said to be liquid.

MoneyWi$e: Saving to Build Wealth Setting goals Financial goals are personal benchmarks that you set for yourself throughout life.  Long term goals  Short term goals

MoneyWi$e: Saving to Build Wealth Dream Your Goals This activity will help you put an approximate price tag on your financial goals.

MoneyWi$e: Saving to Build Wealth Savings accounts Savings accounts are accounts at financial institutions designed to keep your money safe and help it grow.

MoneyWi$e: Saving to Build Wealth Interest Your bank pays you when you leave your money on deposit. Annual percentage yield (APY): the amount your money would earn in one year.

MoneyWi$e: Saving to Build Wealth Two kinds of interest Simple Compound

MoneyWi$e: Saving to Build Wealth Opening an account Shop around for good terms You will need identification (ID) Initial deposit

MoneyWi$e: Saving to Build Wealth IDAs Individual development accounts (IDAs) are special sponsored savings accounts for low income families. Most IDAs match what you save.

MoneyWi$e: Saving to Build Wealth Next time we will cover. The risks and rewards of investing money Certificates of deposit (CDs) U.S. Treasury investment, such as Savings Bonds Saving for retirement Saving for education

MoneyWi$e: Saving to Build Wealth Welcome to Session Two Today we will cover: –The risks and rewards of investing money –Certificates of deposit (CDs) –U.S. Treasury investment, such as Savings Bonds –Saving for retirement –Saving for education

MoneyWi$e: Saving to Build Wealth Risks and rewards As the possibility of profit goes higher, so does the risk that you might lose your money.

MoneyWi$e: Saving to Build Wealth Insured accounts Savings accounts and bank CDs that are insured by the FDIC offer a smaller return because they are safer. Stocks, bonds and mutual funds are not insured.

MoneyWi$e: Saving to Build Wealth Mutual funds Each investor in a fund shares in the fund’s gains, losses and expenses.

MoneyWi$e: Saving to Build Wealth Uninsured investments The fact that you purchase an investment from your bank does not mean that your investment is government-insured.

MoneyWi$e: Saving to Build Wealth Stock market risk There is no guarantee that stock prices will go up or that you will make money on stocks.

MoneyWi$e: Saving to Build Wealth CD, or Time Deposits Certificates of deposit (CDs) are a safe way to make your money grow.

MoneyWi$e: Saving to Build Wealth CDs - Any downside? Your money is off limits until the CD matures. If you cash out a CD before the maturity period ends, you’ll pay a penalty.

MoneyWi$e: Saving to Build Wealth Avoid ‘callable’ CDs These are a good deal for the bank and a bad deal for you.

MoneyWi$e: Saving to Build Wealth U.S. Treasury Investments Include Savings Bonds and Treasury Bills.

MoneyWi$e: Saving to Build Wealth U.S. Savings Bonds Interest can vary, but you are always guaranteed a minimum return.

MoneyWi$e: Saving to Build Wealth Treasury Bills T-Bills are sold for less than their face value. Your profit is the difference between the purchase price and the face value.

MoneyWi$e: Saving to Build Wealth T-Bill Example Buy a $10,000, 26-week T-bill for $9,750. Hold it for the full 26 weeks. Your profit will be $250. You earned about 2.5% return on your money.

MoneyWi$e: Saving to Build Wealth IRAs for retirement savings Individual retirement accounts(IRAs) are savings accounts designed to help people put away money for their retirement.

MoneyWi$e: Saving to Build Wealth Tax breaks on IRAs You are allowed to fund the account with pre-tax income and take a deduction on contributions made during the the current tax year.

MoneyWi$e: Saving to Build Wealth Traditional IRAs In 2003, most taxpayers were allowed to set aside up to $3,000 in an IRA. People over age 50 could deposit $3,500 per year.

MoneyWi$e: Saving to Build Wealth Roth IRAs Roth IRAs are not tax-deferred - you invest income you have already paid tax on. All the money you earn in your Roth IRA is tax-free.

MoneyWi$e: Saving to Build Wealth Employment retirement plans Employers usually match the funds that you contribute to your retirement plan at work. At tax time, you will owe less money.

MoneyWi$e: Saving to Build Wealth Saving for education There are a number of special accounts that can help you save for your children’s college educations.

MoneyWi$e: Saving to Build Wealth Savings Slogan Activity Make your slogan –No more than 15 words. –Inspirational. –Persuasive to people of all ages and all walks of life.

MoneyWi$e: Saving to Build Wealth Questions and Answers We have reserved some time to answer your questions. Please put your hand up if you have a question.

MoneyWi$e: Saving to Build Wealth Congratulations! You have completed the MoneyWi$e seminar on Saving to Build Wealth!

MoneyWi$e: Saving to Build Wealth Your feedback Please fill out the Seminar Evaluation Form and leave it on your way out.