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Saving and Investing

Saving and Investing. Andrea Olson. Reward Yourself By Saving. “Be in control of your money, don’t have your money control you!” Have a goal. What are you saving for? Be specific. College, trip, etc. How much should I be putting away?

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Saving and Investing

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  1. Saving and Investing Andrea Olson

  2. Reward Yourself By Saving • “Be in control of your money, don’t have your money control you!” • Have a goal. • What are you saving for? Be specific. College, trip, etc. • How much should I be putting away? • You should have six to nine months of income in your savings account.

  3. Compounding Interest • When interest is added to the principal, so that, from that moment on, the interest that has been added also earns interest. • The higher the APY, the more interest you receive

  4. Interest Formula • M is the final amount including the principal • P is the principal amount • i is the rate of interest per year • n is the number of years invested

  5. Interest Formula • What is the final amount of money you’ll have if you invest… • $1,000 • For 3 years • With a 5% compound interest rate • M=$1,000(1+.05)^3 • M=???

  6. Shoe Saver vs. Super Saver • Shoe saver puts away five dollars per day per year in a shoebox under their bed • Super saver puts away five dollars per day per year. With 5% interest, compounded daily • How much more money do you think the Super Saver has made after 30 years as compared to the Shoe box saver? Handsonbanking.org

  7. Shoe Saver vs. Super Saver • Choice Financial Adapted by Legacy Program from Handsongbanking.org

  8. Tips For Saving Money • Prioritize your spending • Make it an automatic habit • Set aside “extra” money into savings • Pay your bills on time • Save for retirement

  9. To save $1200 a year…it is… • $100 a month • $23.80 a week • Or just $3.29 a day!

  10. Investing • “Let your money work for you!” • The key to successful investing is buying when the price is low, and selling when the price is high. • Investing involves risk, saving does NOT. • If you cannot afford to lose a certain amount of money, do not invest it.

  11. Types of Investments • Low Risk Investments • Ex: Certificate of Deposit • Bonds • Low risk • Stocks • High risk • Shares • www.Finance.yahoo.com • Mutual Funds • Stocks make no promises; bonds are guaranteed

  12. Rule of 72 72 Interest Rate= Years it will take to double your investment

  13. Rule of 72 • Interest rate:8% 72 8 = ??

  14. Diversify!

  15. “A year from now, you may wish you had started today” -Karen Lamb

  16. Works Cited • “Hands on Banking: Money Skills You Need for Life.” April 2012. <handsonbanking.org> • Quinn, J.B. Making the Most of Your Money Now. Simon & Schuster, 2009. • Schickler, Scott. Conference Call Interview. 9 May 2012. • Chokkavelu, Anand. “The 100 Things I’ve Learned in Investing.” The Motley Fool. 16 Sept. 2012. Web. 29 June 2012. http://www.fool.com/investing/general/2012/06/29/the-100-things-ive-learned-in-investing.aspx • Buffet, Warren. Finance & Accounting. University of Virginia: Darden Business Publishing, 2005.

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