Investment

Saving vs. Investing

*saving:* -for short term goals -money is safe -small interest -easy access to money *investing:* -long term -no guarantee money will grow -higher interest -can rise and fall over time

Income Investments

- receive regular payments for owning an account or investment - more stable and less risky -essentially depositing your money into a bank (or lending it to a business or government) and in return, you get interest as your income -can receive stock dividends -savings account, CD, Saving bond, Market money deposit account, market money mutual fund, corporate bonds,

CD

-bank's version of a savings bond FDIC ensured -issued a penalty if money is withdrawn too early

Market Money Deposit Account

-higher interest rates than savings account, but lower than a CD -withdrawals are limited -ensured by the FDIC -low risk -similar to checking account

Corporate Bonds

-highest interest rates -time is a bond's off

Mutual Funds

-investment that is actually a diversified portfolio of equities, bonds, to other securities -investors purchase shares (units) and can sell them at any time

Market Money Mutual Funds

-money is invested into a diversified group of securities (financial assets) -not FDIC ensured -higher risk and higher return than market money deposit accounts

diversification

-mutual fund and money market mutual funds

real estate

-property comprised of land and the buildings on it as well as the natural resources of the land including livestock, landscape, farmed crops, water, and minerals -investors will buy property hoping to generate a profit

collectables

-relatively rare items -one will buy an item and hope its value increases over time -not very liquid = must be sold -very high risk

investment period

-time when money is invested into a thing and the money is either gaining, loosing, or remaining constant

Savings Account

-very low risk -FDIC ensured up to $250,000 -a liquid asset: can be easily converted into cash

What percent of american millionaires live in million dollar homes?

10%

What is the average net worth of the american millionaire?

3.7 million

What percent of luxury car owners are not millionaires?

80%

low

CD and government bonds

high

collectibles, commodities, penny stocks

Bond (definition)

debt investment where an investor loans money to an entity (cooperation) that borrows funds for a defined period of time at a fixed interest rate

stocks

easy peasy

Types of Investment

gitai yes. no. yes. ye

growth investment

increased risk, but there is a greater return on your investment -better for long term investment strategy -corporate stock and corporate bonds; mutual funds; real estate -stocks, real estates, collectibles, mutual funds

commodity

raw materials (primarily an agricultural product) that can be bought or sold

medium

real estate, market money mutual funds

FUN millionaire stats

tehe

Rate of Return

the annual percentage return on an investment; return can be made up of income, such as interest or dividends

What is the most preferred car brand for the average millionare?

toyota