Saving

Investing

Saving

Investing

Saving

Investing

Saving

Investing

1. To minimize the impact on inflation, which causes you to lose purchasing power

1. To earn a consistent rate of return with lower risk than typical savings accounts

1. To build wealth by reinvesting your returns and allowing them to compound

1. To earn higher average rates of return than you would in a typical savings account

1. Putting $100 per month into an FDIC-insured bank account for short-term goals

1. Buying and selling stocks within the same day to take advantage of short-term price variation

1. Reducing the purchasing power of your money over time

1. Buying assets, like stocks, with the intention to hold them and grow your wealth over the long term.

1. Making frequent trades

1. Starting to invest early

1. Reinvesting earnings

1. Minimizing risk

• Quick short-term gains

• Longer time frame

• Risk is based in the probability of success of individual trades

• Assume the market will increase over time; falling stock prices will bounce back up in the long-term

A BULL market is when the stock market is rising and the economy is booming, while a BEAR market describes a declining market and a receding economy

1. A BULL market is when there is a decline in the stock market and the economy is receding, while a BEAR market describes a rising market and a booming economy.

1. Optimistic/Positive

1. Pessimistic/Negative

1. It is hard to predict trends, and trends can only be identified once they’ve already happened

1. The stock market is typically in a BEAR market for a specific period of time 

1. You have to invest large amounts of money to have your decisions match the performance of the stock market 

1. The stock market is typically in a BULL market for a specific period of time 

1. Bonds are considered a riskier investment option than stocks. 

A bond is a loan given to a company or government by an investor who receives interest in return.

1. Companies and governments issue bonds to fund new projects or ongoing expenses. 

1. Bonds are a way for investors to diversify their portfolios and generate additional income. 

1. Only the face value of the issued bond

1. The face value of the bond issued and interest payments

1. Only interest payments

1. Half the face value of the issued bond and interest payments

1. The risk that the investor is not able to pay the face value of the bond.

1. The risk that the company or government is not able to make interest payments.

1. The risk that the investor demands the face value of the bond before the bond fully matures.

1. The risk that the company or government is unable to pay back the investor.

1. Lower the interest rate

1. Sell your bond at a discounted price

1. Increase the interest rate

1. Sell your bond at a higher price

More

Less

• Investors buy shares, which pays out dividends

• You receive regular interest payments based on the initial coupon rate.  

• Less consistent payments

• Diversified

• Less risky

• Expensive because you buy an entire bond

1. A bond is a government loan made to an individual investor with the expectation that it will be paid back with interest

1. A bond is an investment in which a corporation lends an individual investor money with the expectation that it will be paid back with interest

1. A bond is a government loan made to a corporation with the expectation that it will be paid back with interest

1. A bond is an investment in which an investor lends money to a corporation or government with the expectation that it will be paid back with interest

1. The price of Juan’s bond will increase

1. More investors will be willing to buy Juan’s bond

1. The interest rate of Juan’s bond will increase to reflect the current market

1. The price of Juan’s bond will decrease

1. Buying an individual bond is generally cheaper than buying a bond fund

1. A bond fund can help you diversify your investment portfolio

1. Bonds pay dividends to its investors

1. You receive the principal amount you invest in a bond fund after a certain amount of time

1. Holding your investments for at least five years

1. Making sure your investments are diversified

1. Hiring an investment manager who you think can beat the market

1. Investing small amounts of money over longer periods of time
   

1. It allows your investments to earn more interest

1. It keeps you from reacting to dips in the market and selling at too low of a price

1. Fees are waived for investments held for over five years

1. You get a bonus from the company if you invest for five years

1. Putting the majority of your money into a savings account and investing the rest

1. Investing different amounts of money every month

1. Purchasing shares of stock in a variety of companies and industries

1. Using multiple investment managers to get different opinions

• Savings

• Investment income

• Pension income

• Social Security

1. Social Security is a mandatory payroll deduction for current workers who then receive the retirement benefit on an annual basis.

1. Social Security is an optional program to allow retirees to continue contributing to their individual retirement accounts.

1. Social Security is a government program that pools contributions from current workers to then provide retirement support benefits to those who are eligible.

1. Social Security is a federal health insurance program for retired workers.  

1. Stop distributing benefits to workers who do not pay into the system

1. Reduce benefits to match income from payroll taxes

1. Increase the Social Security tax rate

1. Raise the age of retirement for younger workers

1. Your expenses increase the longer you are in retirement.

1. Your rate of return on investments is guaranteed to increase in retirement, so you can spend more each year.

1. You are required to withdraw more money each year from your retirement account

1. You should take the increasing price of goods and services over time into account.

1. The longer your retirement, the MORE you need to have saved.

1. The longer your retirement, the MORE money you'll receive in government stipends and programs.

1. The longer your retirement, the LESS money you'll be able to withdraw each year.

1. The longer your retirement, the LESS you need to have saved.

1. Assume an aggressive rate of return because that is what the market guarantees.

1. Assume an aggressive rate of return because it accounts for other income streams, such as Social Security.

1. Assume a conservative rate of return because that is how the market is going to perform.

1. Assume a conservative rate of return so that you can plan the worst but hope for the best.

1. You'll need more money each year in retirement.

1. The federal government contributes to your annual savings once you open a retirement account

1. You're assuming you're going to earn more each year so you can contribute more.

1. The increased amount each year takes inflation into account.

1. An IRA is a tax-advantaged investing tool set up by individuals for retirement savings

1. An IRA is a retirement plan offered to you by your employer

1. An IRA is an investment type with a fixed rate of return

1. An IRA is a retirement savings plan that guarantees a fixed rate of return

1. Any money you save into a Traditional IRA is tax deductible

1. There is no limit on the amount of money you can contribute to a Traditional IRA

1. You are taxed on the money in your Traditional IRA when you withdraw it in retirement (it is taxed as ordinary income)

1. You never have to pay taxes when contributing money to a Traditional IRA

1. There is no limit to the amount you can contribute to a Roth IRA

1. The Roth IRA has been around longer than the Traditional IRA (the Roth debuted in the 1930s)

1. The capital gains, interest, & growth of a Roth IRA can be withdrawn tax-free in retirement

1. You are taxed on the money you withdraw in retirement from your Roth IRA (it is taxed as ordinary income)

1. Types of investments that you can choose to have in an investment account

1. Investment accounts that are commonly offered by employers

1. A type of savings account that generally offers around a 1% rate of return

1. Investment accounts that you can open to help you invest for retirement

1. You don’t pay taxes on your investments’ growth each year

1. You can invest your 401(k) into a wider variety of asset types than you can with an IRA

1. Your employer may match some of your 401(k) contributions

1. You can contribute more money into a 401(k) than into an IRA

1. Traditional IRA

Pension

401(K)

Social Security