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#1) How are you spending money now?
#2) Set goals that take into account long-term
financial objectives – (just like our activity at
the beginning of class)
#3) Track spending – stay within guidelines, but
don’t drive yourself crazy! CREATING YOUR
#4) Don’t spend beyond your limits
#5) Tithe yourself – set aside funds to reach
financial investment goals. Financial Investments 4 2/20/2014 Overview Types of Financial Instruments
Example: Financing a College Education Example: Financing Retirement Tradeoff between risk and rate of
return: Safe Investments
• Checking account
Passbook savings account
Money market account
Certificate of deposit Costs of Safety Checking accounts earn 0.1% interest. ($2,000)
Money Market Accounts limit amount of withdrawals a month.
Earn interest rate of 0.2%
CD (stores your money for certain amount of years that you can't touch
that has the highest interest rate, close to inflation) FDIC - insures money up to $250,000 to return if bank fails
2011 - 27% of individuals with checking accounts paid overdraft fees,
on average of $225. In total was $12.6 billion. Interest earned on
money “saved” is
low. Potentially high
opportunity costs. There are
transaction fees on
ATMs and checks. Overdraft fees. 5 2/20/2014 in·vest·ment
1. the action or process of investing
money for profit or material result 700
584.6 600 Ho...
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This document was uploaded on 03/27/2014.
- Spring '14