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Chapter 10:1

Chapter 10:1 . Pages 236-242. Saving for the Future Save to provide for future needs Expected Unexpected. Short –Term needs Emergencies (unemployment, sickness, accident) Vacations Social Events (weddings, reunions) Major purchases (car, furniture). Long-Term Needs House

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Chapter 10:1

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  1. Chapter 10:1 Pages 236-242

  2. Saving for the Future • Save to provide for future needs • Expected • Unexpected • Short –Term needs • Emergencies (unemployment, sickness, accident) • Vacations • Social Events (weddings, reunions) • Major purchases (car, furniture)

  3. Long-Term Needs • House • Education • Retirement • Investing • stocks • bonds • mutual funds • real estate

  4. How Your Money Grows • Principal – amount of money deposited by you • interest – money paid by the bank to you for letting them use your money • compound interest – interest paid on the interest • Annual percentage yield (APY) – the actual interest rate the account pays per year.

  5. Where you can save • Commercial banks (Wells Fargo Bank, Cortrust Bank) • Insured by Federal Deposit Insurance Corporation (FDIC) up to $100,000 per account • Savings Bank (mostly in New England) • Savings and Loan Associations (S&Ls) • Mostly home mortgages • Credit Unions (Dakotaland Federal Credit Union) • Owned by members • Insured by NCUA up to $100,000 • Brokerage Firms • Buy & sell securities

  6. Share account – a savings account at a credit union Securities – stocks and bonds Stock – represents equity (ownership) Bond – represents debt (loan) Stockbroker – helps investors buy & sell securities

  7. Bond You lend money to a government How to do this: Go to the bank with your SS# Pay half what the bond is worth For example: $25 for a $50 bond Wait until the bond matures Turn in the bond for the face value

  8. Stocks You own part of the company Buy a stock through a stockbroker When the company makes money, you get paid a dividend If the company is losing money, you don’t get a dividend Watch the price of the stock. You may choose to sell stock. Write at least one question about this section you would like to ask Brad

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