Part 1Personal Finance

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 2Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Investments -_______

purchased with the goal of providing additional

_________ from the asset itself

but with the risk of loss

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 3Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Investments have the potential for _________returns

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 4Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Savings Tools = Monetary Assets(___________ – quickly and easily

converted to cash)

Savings Tools = Monetary Assets(___________ – quickly and easily

converted to cash)

Investment Tools = Investment Assets(_______________ be easily converted to

cash or penalties charged to access the funds ____________)

Investment Tools = Investment Assets(_______________ be easily converted to

cash or penalties charged to access the funds ____________)

Investments are

__________ than savings

tools

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 5Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

It is recommended

that at least ____________

income is dedicated to savings and investments

each time income is received

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 6Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

What types of feelings result from saving and investing?

Saving vs. Investing

Saving Investing

Emergencies Long-term goals

More ____________ Less liquid

Limited risk Higher ____________

_________ returns (0-4%) ________ returns (8-12%)

Financial security Net worth

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 7Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Total return on investment expressed as a ___________ of the amount of money saved

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 8Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Mandy saved $2,200 in a money market deposit account. After one year, she has a

return of $110. What is Mandy’s rate of return?

Mandy’s rate of return on investment is 5%

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 9Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Inflation__________ in the general level of prices

Inflation RiskThe danger that money ______ be worth

as ________ in the future as it is today

Strive to have the rate of return on

investment be _________ the

rate of inflation

How does inflation relate to investing?

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 10Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

What do you already know about each investment tool?

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 11Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Maturity date – specified ________ in the future when the principal amount of the bond is repaid to the bondholder

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 12Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

• A bond is any _______________or discounted government or corporate security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principal amount of the loan at maturity. Bondholders have an _____ from the issuer, but ____ corporate ownership privileges, as stockholders do.

• Municipal bonds are bonds issued by local ____________ to raise money for roads, bridges and other construction projects.

• ______________ bonds are loans to the issuer of the bond (corporation). When you buy a bond from a company, you are lending money to that company.

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 13Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

• The price of a Series EE bond is ________ the redemption value at _________, so they are said to be discounted 50 percent. Investors pay $50 for a $100 bond, $1,000 for a $2,000 bond, or $5,000 for a $10,000 bond. They make good gifts because the giver buys the bond for only half the price that the bond will be worth at maturity.

• The _____________ on US savings bonds is exempt from state and local taxes.

• Savings Bonds are purchased from the US Government via https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds.htm

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 14Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

A ________ of ownership in a company

_________ of the stock

Usually a stockholder owns a very small part of a company

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 15Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

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© Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 16Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona

Investments are purchased from a ________________(except for real estate and some speculative investments)