NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You...
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Transcript of NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You...
![Page 1: NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Investing: Making Money Work for You Investing: Making Money.](https://reader035.fdocuments.net/reader035/viewer/2022062417/5519f8d25503462e378b461a/html5/thumbnails/1.jpg)
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
Investing:Making Money Work for YouInvesting:Making Money Work for You
NORTH DAKOTA PERSONAL FINANCE EDUCATION
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
Savings and Investments
UniqueSavingsFeatures
UniqueInvestmentFeatures
CommonFeaturesCommonFeatures
What are some features common to both investments and savings?
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Rule of 72
72Interest Rate
=Years Needed to
Double Investment
72 Interest RateRequired=
Years Needed toDouble Investment
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Rule of 72: $10,000 InvestedRule of 72: $10,000 Invested
6
12
18
24
Year 3% 6% 12%
INTEREST RATE
$20,000 $40,000 $160,000
$20,000
$40,000
$80,000
$20,000
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
FinancialPlanningPyramid Penny
StockCom-
modities
CollectiblesSpeculative Stock / Bonds /Mutual Funds
RealEstate
Blue-ChipCommon
Stock
GrowthMutual Funds
High-GradeConvertible
Bonds
High-GradePreferred
Stock
BalancedMutual Funds
High-GradeCorporate Bondsor Mutual Funds
High-GradeMunicipal Bondsor Mutual Funds
Money MarketAccounts
or Mutual Funds
Certificatesof Deposit
U.S. SavingsBonds
Insured Savings / Checking Accounts
TreasuryIssues
Highest RiskHighest Earnings
Lower RiskLower
Earnings
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Interest Rate
3%
24 Yrs.
$800
4%
6%
8%
12%
6 Yrs. 9 Yrs. 12 Yrs. 18 Yrs.
$400
$400
$400
$200
$200
$200
$200
$200
Impact of Higher Returns on Savings and InvestmentsRule of 72: The approximate frequency with which $100 doubles at specific interest rates
21
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
Investment Options
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
Options Include
•Savings accounts
•U.S. savings bonds
•Certificates of deposit
•Money market deposit accounts
![Page 9: NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Investing: Making Money Work for You Investing: Making Money.](https://reader035.fdocuments.net/reader035/viewer/2022062417/5519f8d25503462e378b461a/html5/thumbnails/9.jpg)
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
Options Include
•Money market mutual funds
•Corporate and government bonds
•Growth investments
![Page 10: NEFE High School Financial Planning Program Unit Three – Investing: Making Money Work for You Investing: Making Money Work for You Investing: Making Money.](https://reader035.fdocuments.net/reader035/viewer/2022062417/5519f8d25503462e378b461a/html5/thumbnails/10.jpg)
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
Options Include
•Stocks
•Real estate
•Collectibles
•Mutual funds
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Dollar Cost Averaging
AmountInvested
Share Price ($)
SharesPurchase
d$1,000 $20 50
AmountInvested
Share Price ($)
SharesPurchased
$100 $20.00 5.00
$100
$100
$100
$100
$100
$100
$100
$100
$19.50
$19.25
$19.75
$19.20
$18.90
$18.00
$18.60
$19.78
5.13
5.19
5.06
5.215.29
5.56
5.38
5.06
$1,000 $20 50 $19.39* 51.66
$100 $20.90 4.78
One-time Investment Dollar-cost Averaging
$1,000
* Average Share Price4321
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You
Ready Set
GoReady Set
Go