Saving - PowerPoint PPT Presentation

Loading...

PPT – Saving PowerPoint presentation | free to download - id: 734903-MTczO



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Saving

Description:

Saving & Investing Use your money to make money – PowerPoint PPT presentation

Number of Views:25
Avg rating:3.0/5.0
Slides: 38
Provided by: Technol109
Category:
Tags: investing | saving

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Saving


1
Saving Investing
  • Use your money to make money

2
What is saving?
  • Saving sounds boring

3
What is saving?
  • Saving sounds boring
  • 1 saved is 1 not spent on something you want
    right now

4
What is saving?
  • Saving sounds boring
  • 1 saved is 1 not spent on something you want
    right now
  • Try thinking about it differently Rather than
    focusing on what youre NOT buying now, think
    about what you CAN buy in the future

5
What is saving?
  • Think of this
  • The Opportunity Cost of buying something --
    like a cheeseburger or an Oreo Blizzard (which
    will quickly be used up) -- is the Future Value
    of the money.

6
What is saving?
  • If you had 5,000 today, what would you do?

7
What is saving?
  • If you had 5,000 today, what would you do?
  • If you invest it at 7 interest for 4 years
  • End of year 1 5,350
  • End of year 2 5,724
  • End of year 3 6,125
  • End of year 4 6,553

8
What is saving?
  • If you had 5,000 today, what would you do?
  • If you invest it at 10 interest for 4 years
  • End of year 1 5,500
  • End of year 2 6,050
  • End of year 3 6,655
  • End of year 4 7,320

9
What is saving?
  • Saving early is best it takes advantage of the
    power of compound interest.

10
What is saving?
  • Saving early is best it takes advantage of the
    power of compound interest.
  • Remember the Rule of 72? 72/rate of interest
    tells you how long it takes your money to double.

11
What is saving?
  • Saving early is best it takes advantage of the
    power of compound interest.
  • Remember the Rule of 72? 72/rate of interest
    tells you how long it takes your money to double.
  • If you invest when youre young, your money has
    more chances to double.

12
Compound Interest
PERSON A PERSON B
AGE INTEREST PER YEAR ANNUAL INVESTMENT INTEREST EARNED TOTAL SAVED ANNUAL INVESTMENT INTEREST EARNED TOTAL SAVED
18 10
19 10 2,000 200 2,200 0 0 0
20 10 2,000 420 4,620 0 0 0
21 10 2,000 662 7,282 0 0 0
22 10 2,000 928 10,210 0 0 0
23 10 2,000 1,221 13,431 0 0 0
24 10 2,000 1,543 16,974 0 0 0
25 10 2,000 1,897 20,872 0 0 0
26 10 2,000 2,287 25,159 0 0 0
27 10 2,000 2,716 29,875 0 0 0
28 10 2,000 3,187 35,062 0 0 0
29 10 2,000 3,706 40,769 0 0 0
30 10 2,000 4,277 47,045 0 0 0
13
Compound Interest
AGE INTEREST PER YEAR ANNUAL INVESTMENT INTEREST EARNED TOTAL SAVED ANNUAL INVESTMENT INTEREST EARNED TOTAL SAVED
31 10 0 4,705 51,750 2,000 200 2,200
32 10 0 5,175 56,925 2,000 420 4,620
33 10 0 5,692 62,617 2,000 662 7,282
34 10 0 6,262 68,879 2,000 928 10,210
35 10 0 6,888 75,767 2,000 1,221 13,431
36 10 0 7,577 83,344 2,000 1,543 16,974
37 10 0 8,334 91,678 2,000 1,897 20,872
38 10 0 9,168 100,846 2,000 2,287 25,159
39 10 0 10,085 110,931 2,000 2,716 29,875
40 10 0 11,093 122,024 2,000 3,187 35,062
41 10 0 12,202 134,226 2,000 3,706 40,769
42 10 0 13,423 147,649 2,000 4,277 47,045
43 10 0 14,765 162,414 2,000 4,905 53,950
44 10 0 16,241 178,655 2,000 5,595 61,545
45 10 0 17,865 196,520 2,000 6,354 69,899
14
Compound Interest
PERSON A PERSON B
AGE INTEREST PER YEAR ANNUAL INVESTMENT INTEREST EARNED TOTAL SAVED ANNUAL INVEST MENT INTEREST EARNED TOTAL SAVED
46 10 0 19,652 215,172 2,000 7,190 79,089
47 10 0 21,617 237,790 2,000 8,109 89,198
48 10 0 23,779 261,569 2,000 9,120 100,318
49 10 0 26,157 287,726 2,000 1,032 112,550
50 10 0 28,773 316,498 2,000 11,455 126,005
51 10 0 31,650 348,148 2,000 12,800 140,805
52 10 0 34,815 382,963 2,000 14,281 157,086
53 10 0 38,296 421,259 2,000 15,909 174,995
54 10 0 42,126 463,385 2,000 17,699 194,694
55 10 0 46,338 509,723 2,000 19,669 216,364
56 10 0 50,972 560,696 2,000 21,836 240,200
57 10 0 56,070 626,765 2,000 24,220 266,420
58 10 0 61,677 678,442 2,000 26,842 295,262
59 10 0 67,844 746,286 2,000 29,726 326,988
60 10 0 74,629 820,915 2,000 32,899 361,887
61 10 0 82,091 903,006 2,000 36,389 400,276
62 10 0 90,301 993,307 2,000 40,228 442,503
63 10 0 99,331 1,092,637 2,000 44,450 488,953
64 10 0 109,264 1,201,901 2,000 49,095 540,049
65 10 0 120,190 1,322,091 2,000 54,205 596,254
15
So you should save
  • So once youre convinced you should save, where
    do you put your money? How do you find these
    great returns and not lose money when the stock
    market nosedives?

16
Investment options
  • Mattress
  • Savings account
  • CDs
  • Bonds
  • Stocks
  • Mutual funds
  • Retirement accounts
  • College savings accounts

17
The mattress plan
  • Some people keep all of their earnings in their
    house, whether in a piggy bank, buried in the,
    garden, or sewn into a mattress. This is because
    they distrust banks.
  • RISK ANALYSIS
  • Your money is losing value to inflation, and you
    could lose it in a robbery. No FDIC insurance for
    the mattress.

18
Savings account
  • A savings account is a basic bank account that
    pays interest. The average savings account is
    paying about 0.6 right now.
  • RISK ANALYSIS
  • Money in savings accounts earns interest and is
    FDIC insured. However, the interest rate is often
    lower than inflation, so the real interest rate
    is negative.

19
Certificate of Deposit
  • A CD is like a savings account, but you promise
    to leave the money there for a set period, like
    12 months. 12-month CDs are paying 2 right now.
    They are FDIC insured.
  • RISK ANALYSIS
  • Similar to a savings account, but less liquid.

20
Bonds
  • A bond is a loan to a business or the government.
    There are many, many kinds of bonds, from junk
    bonds to Treasury Bills.
  • RISK ANALYSIS
  • Bonds are riskier than CDs but safer than stocks.
    They are not FDIC insured. EE bonds are paying
    1.5 Most junk bonds earn 5 a year.

21
Stocks
  • Stock is a share of ownership in a corporation.
    As you know, stock prices fluctuate wildly.
  • RISK ANALYSIS
  • Over time, stocks usually outperform bonds. But
    in any given year, they may lose a lot more
    value. They are not FDIC insured.

22
Stocks v. Bonds
  • From Naked Economics
  • From 1945-1997, a portfolio of 100 stocks earned
    12.9 annual return.
  • In the same period, a portfolio of 100 bonds
    earned 5.8 annual return.
  • BUT.

23
Stocks v. Bonds
  • In its worst year, the stock portfolio lost 26.5
    of its value. OUCH.
  • The bond portfolio never lost more than 5 of its
    value in a single bad year.
  • Also, the stock portfolio had negative annual
    returns 8 times, while the bond portfolio only
    lost money once.
  • Risk is rewarded, if you have a tolerance for
    it.

24
Mutual Funds
  • A mutual fund is a professionally managed pool of
    money. The manager invests in a mix of stocks,
    bonds and the money market, depending on the
    level of risk.
  • RISK ANALYSIS
  • Less risky than individual stocks because youre
    not putting all your eggs in one basket. However,
    managers rarely beat the SP 500 index. Not FDIC
    insured.

25
Retirement Accounts
  • Retirement accounts include pensions, 401(k)s,
    403(b)s, IRA accounts, etc.
  • RISK ANALYSIS
  • Retirement accounts make it easy for you to set
    money aside, usually tax free. Risk level depends
    on the type of account, but not FDIC insured. An
    essential first step in retirement planning.

26
College Savings Accounts
  • New financial tools to help parents afford
    skyrocketing tuition. Some include pre-payment.
    Most are tax-deferred.
  • RISK ANALYSIS
  • Not FDIC insured, carries the same risk/return as
    mutual funds, but with some tax benefits. Can
    only be spent on college costs.

27
Being Smart with your
  • To summarize, youll have more money in the
    future if you start saving now. Its better to be
    the lender -- thats what you are when you invest
    -- than the borrower, because YOU get paid the
    interest.

28
Being Smart with your
  • Live below your means

29
Being Smart with your
  • Live below your means
  • Create an emergency fund

30
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you

31
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you
  • Use credit cards correctly

32
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you
  • Use credit cards correctly
  • Take enough risk possibly consult a financial
    planner

33
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you
  • Use credit cards correctly
  • Take enough risk possibly consult a financial
    planner
  • Set up a house fund

34
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you
  • Use credit cards correctly
  • Take enough risk possibly consult a financial
    planner
  • Set up a house fund
  • Buy the smallest house on the nicest block

35
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you
  • Use credit cards correctly
  • Take enough risk possibly consult a financial
    planner
  • Set up a house fund
  • Buy the smallest house on the nicest block
  • Take advantage of employer-matched retirement
    accounts

36
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you
  • Use credit cards correctly
  • Take enough risk possibly consult a financial
    planner
  • Set up a house fund
  • Buy the smallest house on the nicest block
  • Take advantage of employer-matched retirement
    accounts
  • Buy a used car, not a new one

37
Being Smart with your
  • Live below your means
  • Create an emergency fund
  • Make your money work for you
  • Use credit cards correctly
  • Take enough risk possibly consult a financial
    planner
  • Set up a house fund
  • Buy the smallest house on the nicest block
  • Take advantage of employer-matched retirement
    accounts
  • Buy a used car, not a new one
  • Start saving TODAY!
About PowerShow.com