Personal ManagementCharting Your Course Through Time & Money

Requirement 4 – Saving & Investing► Saving your money

• Goal:• Set it aside for future use• Protect it (very low risk)• Assure it is always available

► Investing your money• Goal:

• Obtain a Return on Investment (ROI)• Balance Risk vs. Reward• Balance Accessibility vs. Future Need

Types of Investments► Stock

• You become a part owner of a company► Bond

• You lend money to a company or government► Certificate of Deposit

• You lend money to a bank► Real Estate

• You own a piece of land and/or a building► Commodities

• You own tradable items such as: Gold, silver, wheat, pork bellies, oil, etc.

► Mutual Funds• You own a share in a collection of individual investments

(stocks or bonds) from many companies

Risk vs. Return► Risk – the chance you will loose money or

not get any of your money back► Return – the amount of money you earn as

the result of an investment► Examples: (put them in order of risk, then return)

• US Savings Bonds Series EE• Stock in the Latest High-Tech Startup• A High Quality Corporate Bond• Mutual Fund of Large Companies

InterestSimple vs. Compound► Simple

Interest is paid on the deposit amount only

► Compound Interest is paid on deposit plus past interest payments

Simple Interest Compound InterestDeposit: $100 Deposit: $100Rate: 5% Rate: 5%

YearAccount Balance Year

Account Balance

1 $105.00 1 $105.002 $110.00 2 $110.253 $115.00 3 $115.764 $120.00 4 $121.555 $125.00 5 $127.636 $130.00 6 $134.017 $135.00 7 $140.718 $140.00 8 $147.759 $145.00 9 $155.1310 $150.00 10 $162.89

Requirement 5 – Publicly Traded Stocks► Dividend

• The portion of profit returned to the shareholders► Yield

• Dividend as a percentage of the stock price► Price / Earnings Ratio

• The ratio do the stock price to the earnings (profits) per share► Daily High / Low / Close & Volume

• Basic measures of stocks trading activity► Net Change & Percent Change

• The measure of difference in price form day to day► 52 week High & Low

• Helps determine the longer term direction of a stock and its volatility

Select Five Stocks and Complete the Table

Company Name:

Stock Ticker:

Price / Earnings Ratio:

Dividend

Yield

52 week High

52 week Low

30-Mar

High

Low

Close

31-Mar

High

Low

Close

Class Syllabus (next time)► Class #3 – 3/16/09

• Requirement 4 – Saving & Investing• Saving vs. Investing• Risk & Return

• Requirement 5 – Publicly Traded Stocks• Dividend & Yield• Price / Earnings Ratio• Daily High / Low / Close & Volume• Net Change & Percent Change• 52 week High & Low• Select five stocks and find the current price, 1-day change,

52 week high and low (homework)

• Requirement 6 - Investment Options• Stocks, Mutual Funds, Life Insurance, CDs, Savings Acct. &

US Savings Bonds• Advantages & Disadvantages