1. What is an investment? Create a short definition.

2. What is an investment? Create a short definition.
Create a list of 5 examples that fit the definition.

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

4. 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)

5. 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)

6. 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

7. 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

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

9. 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.

10. 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.

11. 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.