Market Basics
WHEN YOU BUY THIS, YOU ARE BUYING A TINY PIECE OF OWNERSHIP IN A COMPANY.
What is a Stock?
A RETIREMENT SAVINGS PLAN SPONSORED BY AN EMPLOYER, WHO WILL SOMETIMES MATCH THE MONEY YOU CONTRIBUTE.
What is a 401k?
THE TIME OF LIFE WHEN YOU DECIDE TO STOP WORKING, WHICH IS THE PRIMARY REASON MOST PEOPLE INVEST LONG-TERM.
What is Retirement?
THE STRATEGY OF INVESTING A SET AMOUNT OF MONEY REGULARLY (LIKE $50 A MONTH) NO MATTER WHAT THE STOCK MARKET IS DOING.
ESSENTIALLY A LOAN YOU GIVE TO A COMPANY OR GOVERNMENT, AND THEY PAY YOU BACK LATER WITH INTEREST.
What is a Bond?
THIS INDIVIDUAL RETIREMENT ACCOUNT IS ONE YOU OPEN ON YOUR OWN, NOT THROUGH AN EMPLOYER.
What is an IRA?
THE GENERAL INCREASE IN PRICES OVER TIME THAT CAUSES YOUR SAVED CASH TO SLOWLY LOSE ITS BUYING POWER/VALUE.
What is Inflation?
THIS STRATEGY MEANS NOT PUTTING ALL YOUR EGGS IN ONE BASKET; SPREADING YOUR MONEY ACROSS DIFFERENT INVESTMENTS TO LOWER YOUR RISK.
What is Diversification?
A BASKET OF MANY DIFFERENT STOCKS OR BONDS BUNDLED TOGETHER, MAKING IT EASIER TO BUY MANY AT ONCE.
What is a Fund?
WITH THIS FLAVOR OF RETIREMENT ACCOUNT, YOU PAY TAXES NOW, SO YOUR MONEY GROWS COMPLETELY TAX-FREE FOR THE FUTURE.
What is a Roth account?
EARNING INTEREST ON YOUR INTEREST, ALLOWING YOUR MONEY TO SNOWBALL AND GROW EXPONENTIALLY OVER A LONG PERIOD.
What is Compounding?
THIS STRATEGY INVOLVES KEEPING YOUR CASH IN A SAVINGS ACCOUNT. IT IS LOW RISK, BUT IT SUFFERS FROM THIS MAJOR DRAWBACK OVER TIME.
What is Low Reward?
GENERALLY, THE HIGHER THE POTENTIAL REWARD OF AN INVESTMENT, THE HIGHER THE LEVEL OF THIS.
What is a Risk?
WITH THIS FLAVOR OF ACCOUNT, YOU INVEST WITHOUT PAYING TAXES NOW, BUT YOU PAY TAXES WHEN YOU WITHDRAW THE MONEY IN RETIREMENT.
What is a Traditional account?
IF INFLATION GOES UP BY__% PER YEAR, WHILE THE AVERAGE MARKET INCREASES BY __%PER YEAR.
What is 3%?
What is 7-10%? (avg. estimates vary - anything within this range = win!)
LAILA, JONAS, AND YUKI ARE PLAYING BUILD YOUR STAX, AN INVESTING GAME.
LAILA ONLY INVESTS IN CD'S AND BONDS. JONAS INVESTS IN STOCKS AND GOLD. YUKI ONLY INVESTS IN INDEX FUNDS.
__'S STRATEGY IS SAFEST.
__'S STRATEGY BALANCES SAFETY AND REWARD.
__'S STRATEGY IS RISKIEST.
Who is Laila?
Who is Yuki?
Who is Jonas?
WHEN INVESTING, YOU CAN EARN MONEY THROUGH ___ and ___.
THE RULE TO FOLLOW: YOU WANT TO BUY LOW AND SELL ___.
What is
- Dividends?
- Capital Gains?
What is "Buy Low, Sell High?"
IF YOU INVEST $100 PER MONTH FOR THE NEXT 20 YEARS, HOW MUCH MONEY WILL YOU HAVE AT THE END? (ASSUME 7% GROWTH)
ROUND TO THE NEAREST DOLLAR.
What is $52,093?
TIMING THE MARKET MEANS ___ AND IS RISKY BECAUSE ___.
(DESCRIBE USING A SHORT SENTENCE AND YOUR OWN WORDS.)
What is
"Investing all at once/One lump sum, instead of smaller, regular investments"?
What is
"You want to buy low and sell high, so if you buy a lot, and you are unlucky and buy high, you'll lose a lot of money"?
IF YOU INVEST $20 EVERY MONTH FOR YOUR CHILD AFTER THEY ARE BORN, HOW MUCH MONEY WILL THEY HAVE WHEN THEY ARE 60?
WHAT IS THE STRATEGY YOU'VE USED HERE?
What is $949,904?
What is Dollar Cost Averaging?