1. Investments First rule: Pay yourself first through saving.
What is compound vs. simple interest?
Second rule: As you acquire wealth and income learn to diversify. You want investments in all categories of risk. Low risk, medium risk, and high risk.
Liquidity: ease one can access money. Stocks have hard liquidity, a checking or savings account has easy liquidity.

2. Warm Up: What is liquidity?
Which of the following is a more liquid asset/investment?
Savings account
Money market account
Stocks

3. Municipal Bonds: Low risk, Low return( earns low interest) A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities.

4. Money Market Account and CD’s
Money Market Accounts: accounts held in banks and other financial institutions that earn higher interest than CDS and savings accounts.
Usually have to have a large amount to open an account. Easy liquidity
CD’s: Certificates of Deposit. Time limit account, Short- or medium-term, interest- bearing, FDIC-insured debt instrument offered by banks and savings and loans. Low interest, low risk- but not liquid until it matures.

5. I. Types of Investments-Stocks
Buying stock
Stock is issued in portions known as shares- portions of the company. High risk but can bring in a high return.
Corporations sell stock to raise money to start, run, or expand their business
Dividends- portion of profits shared with investors (size depends on company profits)
Capital Gains- When a person sells stocks, land, or any asset and makes a profit ( you sell it for more than you originally paid for it- you make a capital gain.
People who make a capital gains
Will pay a capital gains tax.

6. Bull Market vs Bear Market
A bull market is when the stock market is high and doing well. The economy is in an expansion period of growth.
A bear market usually indicates a weak economy and slow economic growth in a recession.

7. Types of corporations and stock
Closely held corporations- stock only offered to a few people (ex: family)
Publicly held corporations- many shareholders buy or sell stock on the open market

8. Common stock- voting owners of company, one vote per stock
Preferred stock- nonvoting members but receive dividends first
Mutual funds- collection of various stocks, usually less yield but less risk
Bonds- gov’t loans, less flexible and less yield but no risk

9. IRA’s and 401K’s Both are used as retirement accounts.
401K- offered through employer.
Employee can contribute a certain amount of their paycheck into the acct.
Tax deferred-pay taxes when you take it out
Some companies may match the contribution

10. IRA’S: Individual Retirement Acct.
Roth IRA: Pay taxes up front
After-tax contributions, so withdrawals are tax-free in retirement.
Traditional IRA: Pay taxes later (tax deferred)
Contributions may be tax-deductible, and you'll pay taxes when you make withdrawals in retirement.