Creating Wealth
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Transcript of Creating Wealth
Creating WealthA primer for high school students
INCOME
WEALTH
Sources of Income
• Allowance• Job• Inheritance• Career• Investments
Return on Investment Formula
Investment Proceeds – Cost of Investment____________________________________
Cost of Investment
Future Value of a Single Sum
• PV is amount invested• r is the interest rate• n is the number of investment periods
Future Value with Compounding
• m is the compounding frequency, • e.g., semi-annual would be 2
Power of Compound Interest
• Invest a sum and keep the interest in • “interest on interest”
RISK RETURN
Wealthy Barber
Save 10% of what you earn...FIRST!
TAX FREE SAVINGS ACCOUNT
• $5000 annually• All interest\profits not taxable
http://www.tfsa.gc.ca/
Warren Buffet
• Buy companies’ stocks whose products you use everyday• Buy and Hold
Alternatives
• Collectibles– Trading cards– Art– Comic books– Antiques
• Gold, Silver
Fun Websites
• Compound Interest Calculator:– http://www.calculatorweb.com/calculators/comp
oundcalc.shtml
• Chartgame (stock trading simulation):– http://chartgame.com/