1. Investments: Simplified Adult Living

2. What is investing? Investing is a way to make money with your money. First you have to make money Try to SAVE some money in a highly liquid account. NEXT, make your money grow through investing.

3. Why should I invest? Two main reasons: –To stay ahead of inflation –To achieve financial goals

4. When should I invest? THE SOONER THE BETTER!!!! Let the “snowball” work for you!!!

5. What are the risks? Losing money Risk normally works proportionately with reward…. the lower your risk (conservative investments) the lower your reward the bigger your risk… the more the possible reward

6. Who? Everyone who is making money should be investing AFTER setting up a savings account with 3-6 months worth of income saved. There are different types of investors – conservative (low-risk takers) and more aggressive (risky) YOU may be one of these or a combination throughout your life depending on your goals.

7. Savings Accounts 1 st “investment” Set up at a bank Should have 3-6 months worth of income in it Highly liquid No risk- FDIC LOW interest

8. CDs Certificates of deposits YOU decide the length of time (3mon- 15yrs) YOU decide the amount ($100- $250,000) Bank determines interest rate for your CD. GREAT first investment!!

9. Treasury Bills Backed by the U.S. government Range in price from $1,000-5 million Avaliable in 1 month, 3 month, and 6 month maturities Low risk (FDIC) Low return (BUT over short time)

10. Bonds Corporate or Government bonds- they sell bonds- you loan them money- they repay in a set period of time (usually LONG-5-25 yrs) Higher interest (compared to savings or CD) Not liquid- penalized if “cashed” early If the company bankrupts- you MAY not get paid (but will be paid before stockholders)

11. Stocks You own a little piece of the company If the company does well… your little piece of it does well (profits) If the company bankrupts you lose you money Risk & reward depends on the companies you choose to invest in. Not very liquid- need to sell your piece before you get the $

12. Real Estate Purchasing property or land for the purpose of resale Time consuming Expensive initial investment Potential rewards- HIGH, risk-HIGH Takes some knowledge of the R.E. “market”- when/where to buy and possibly “flipping” knowledge/ability

13. Commodities Oil, gold, silver, metals Investing in our future need for this product- can be speculitive Low interest but steady income

14. Collectables Items that increase in value due to time/ demand Coins, stamps, baseball cards, beanie babies, etc Can’t count on future demand for these items Usually need to preserve the item for best value Can make $ off “things” you don’t need/want anymore

15. Mutual Funds A “bucket” of stocks or bonds Professionally managed Diversification reduces risk Risk depends on what is in your “bucket” Liquidity depends on what is in your “bucket” Great for an investor who doesn’t want to constantly monitor your investment