1. An Introduction to Investing Your Money Source: CTAinvest.org

2. What does this mean? "How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." "How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." –Robert G. Allen

3. Terms to Know Contributions Contributions – the amount of money you put into investments Portfolio Portfolio – a collection of your investments Investing Investing – putting money into stocks, bonds, mutual funds, etc. to make money Stocks Stocks – shares in the ownership of companies Bonds Bonds – loans to a companies that earn you interest after a fixed amount of time Treasury Bills Treasury Bills – Buy a bill for $9,800 and 13 weeks later it is worth $10,000

4. Terms to Know (Continued) Mutual Funds Mutual Funds – a collection of stocks, bonds, and cash equivalents Cash equivalents Cash equivalents – CDs, Treasury bonds, etc. that can easily be converted to cash Assets Assets – what your investments are worth Diversification Diversification – investing in a variety of financial products (stocks, bonds, etc.) 401k 401k – Retirement account where taxes are paid when you withdraw the money

5. Terms to Know (Continued) Roth IRA Roth IRA - Retirement account where taxes are paid when put the money into your account Certificates of Deposit Certificates of Deposit (CDs) – A short term loan to a bank that earns you money in interest. Money Market Account Money Market Account – like a large savings account with higher interest Futures Futures – The purchase of assets at a future date and price (very risky)

6. Time is Your Friend There’s a huge advantage to investing early. Let’s say you start investing $2,000 every year when you’re 18. You put it into an account that grows by 7% each year, and continue to invest the same amount for 10 years. Then you stop and just let that money sit for the next 38 years, where it continues to grow at 7% a year, until you’re 65 years old. Now say your sister decides not to invest until she turns 31. Then she puts $2,000 a year into an account that also earns 7% a year—and does it for the next 35 years, until she turns 65. You will have $84,944 more than your sister and you will have invested $50,000 less than your sister! Who will have more money? YOU will. You will have $84,944 more than your sister and you will have invested $50,000 less than your sister!

7. A 401k Can Save You On Taxes Now!

8. Three Types of Assets Cash Equivalents Bonds Stocks

9. Cash Equivalents

10. Bonds

11. Stocks

12. Performance of Stocks, Bonds, and Cash Equivalents Stocks generally earn more over time than bonds and cash equivalents. 2014

13. Stock Market Indexes

14. Asset Allocation

15. Diversification

16. Portfolio Models

17. Many Baskets of Eggs Diversification is reducing investment risk by putting money in several different types of investments Did your parents ever tell you not to put all your eggs in one basket? If so, they were actually trying to tell you to diversify your options. Diversification is reducing investment risk by putting money in several different types of investments. By spreading your money around, you’re reducing the impact that a drop in any one investment’s value can have on your overall investment portfolio. A mutual fund is an example of an investment that uses diversification. For instance, say you get $100 and decide to put $50 into both a money market account and a stock. Five years later, the stock company has collapsed from a scandal, and the stock you invested in is worthless. Yes, you’ve now lost $50. But you would have lost the entire $100 if you hadn’t split your investment between the money market account and the stock.

18. Pyramid of Investment Risk Futures Stocks Bonds Mutual Funds Real Estate Treasury Bills & Bonds Government Savings Bonds Savings Accounts Money Market Accounts Certificate of Deposit (CDs) Cash

19. On Your Own