PRESENTATION OUTLINE
MY INVESTMENTS
- Savings account: $30,000
- Certificate of deposit: $30,000
- Bond: $20,000
- Real estate: $10,000
- Stocks: $10,000
Savings account
Definition: a safe way to save and earn interest
Interest rate: .06-.08%
Risk: low risk because the company usually insures the accounts and owners can access their funds eaisily
Facts: - there are more specific types of savings accounts such as health and education.
How?: you go to the bank and open an account
Why?: I chose to invest $30,000 into this investment tool because it is really safe and a smart investment
Certificate of deposit
Definition: a deposit in a savings institution that earns a fixed interest rate for a specific period of time
Interest rate: 0.51%
Risk: moderate risk because there can be fees but the FDIC insures deposit accounts
Facts: - if you do not cash out your cd at the end of the term then usually the bank will roll it over for another term. - there are diff. Types of CDs like traditional or liquid.
How?: Research banks and credit unions and pick the one you want to go through
Why?: I chose to put $30,000 into this investment tool because it was one of the least risky ones.
Bonds
Definition: form of lending to a company or the government
Interest rate: .10 - .26%
Risk: low risk
Facts: - yield to maturity us the measurement most often used. - the more mature the bond the better/more money you make
How?: find a company or business that sells bonds
Why?: I chose to put $20,000 in this because it is another low risk investment that pays off in the long run
Real Esate
Definition: any residential or commercial property as well as the rights accompanying that land
Interest rate: 3.6%
Risk: high risk because you could end up in debt or have to pay additional expenses towards the property
Facts: - it is better to study local pricing before investing. - if tax is low, real estate is higher in demand
How?: have a real estate agent help you research and find the property you want then purchase it
Why?: I chose to invest $10,000 into real estate because of the return you can receive
Stocks
Definition: a Share of ownership in a company
Rate of return: 10-15%
Risk: high risk because what you invest in could do well or do poor, you never know
Facts: - Buy low and sell high. - You want to invest in a stock for a long time, think long term
How?: Find a broker, set up an account by depositing cash into brokerage account, tell broker how many and what types of stocks you'd like to purchase
Why?: I chose to put $10,000 into a stock because if it works out you could be making money at a constant rate.
Why is diversification so important? Because it aims to maximize return by investing in different areas that would each react differently to the same event.
Why should individuals change their savings and investing plans throughout their life cycle? Because as you grow older and your life changes you are not going to need or want to invest in the same tools. Each tool fits best for a certain time in your life. For example when you are closer to 60 you won't invest into a bond because the money won't be worth that much by the time you use it.
