Savings Plans and Goals.  What are you saving for?  How do you save?

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Presentation transcript:

Savings Plans and Goals

 What are you saving for?  How do you save?

How much to save and invest?  Ask yourself-  How much do you spend on your fixed expenses?  What are your reasons for saving?  What degree of risk are you willing to take?  How important is it that your saving being readily available in case you need immediate cash?

Bull and Bear Markets

 Bond- formal contract to repay borrowed money and interest on the borrowed money at regular future intervals.  For example, say you buy a bond with a face value of $1,000, a coupon of 8%, and a maturity of 10 years. This means you'll receive a total of $80 ($1,000*8%) of interest per year for the next 10 years. Actually, because most bonds pay interest semi-annually, you'll receive two payments of $40 a year for 10 years. When the bond matures after a decade, you'll get your $1,000 back.

 Mutual Funds- A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund.

Investing for retirement  Pension plans- Company plans that provide retirement income for their workers. One of the most common is a 401k plan, in which you allow a certain portion of your check to be withheld, and often the company matches a portion of that amount.  Social Security

Individual Pension Plans  Keogh Plan- retirement plan that allows self- employed individuals to save a maximum of 15 percent of their income and deduct that amount from their yearly taxable income.  Individual retirement account (IRA)- private retirement plan that allows individuals or married couples to save a certain amount of untaxed earnings per year with the interest being tax-deferred.  Roth IRA- Private retirement plan that taxes income before it is saved, but does not tax interest when funds are used at retirement.

Real Estate as an Investment  This can be risky. What are the risks/rewards?

Spreading your investments  Diversification- spreading of investments among several different types of accounts to lower overall risk.