Stocks v. Bonds
What are stocks?
A piece of a company that you own
What is independent investing?
Investing by yourself
You invest $1 at an annual fixed interest rate of 10%, how long will it take for the investment to double?
7.2 years
What is investing for retirement?
putting money into financial vehicles with the goal of supporting your lifestyle during retirement
what is investing?
Allocating money with the expectation of generating a positive return in the future
What are bonds?
Money that you loan to a company
What are mutual funds?
Investing that you do in a group
You invest $60 at an annual fixed interest rate of 3%, how long will it take for the investment to double?
24 years
What is an IRA?
A personal savings account that offer tax advantages for individuals in the United States
Why do stocks have more rewards?
As a company grows, the value of the stock grows along with it.
Why are stocks risky?
No guaranteed returns to the investor
Who calls the shots in independent investing?
You call the shots
You invest $738 at an annual fixed interest rate of 4%, how long will it take for the investment to double?
18 years
What is a 401(k)?
A retirement plan that allows employees to contribute a portion of their salary to the plan
Why is it safer to do mutual funds?
Someone will watch the stock market 24/7
Why are bonds safer than stocks?
You are almost guaranteed to get your money back
Who calls the shots in mutual funds?
It is a group decision
You invest $4058 at an annual fixed interest rate of 7%, how long will it take for the investment to double?
10.3 years
What is a pension?
A retirement plan in which an employer provides a fixed income to employees after they retire
How do you determine the rule of '72?
Take the number 72 and divide it by the interest rate you hope to earn, giving you the approximate years it will take for your investment to double
What does a owner of a company have to do if they don’t want to pay back a bond?
Declare bankruptcy
Why is it more risky to do independent investing?
You can’t pay attention to the stock market 24/7
You invest $62849 at an annual fixed interest rate of 10%, how long will it take for the investment to double?
5.5 years
Why should you invest for retirement?
Secure financial stability during your non-working years
What is the most used retirement plan?
401(k)