Savings Plans and Goals

What are you saving for? How do you save?

How much to save and invest?

Ask yourself-How much do you spend on your

fixed expenses?What are your reasons for saving?What degree of risk are you willing

to take?How important is it that your saving

being readily available in case you need immediate cash?

Bull and Bear Markets

Bond- formal contract to repay borrowed money and interest on the borrowed money at regular future intervals.

For example, say you buy a bond with a face value of $1,000, a coupon of 8%, and a maturity of 10 years. This means you'll receive a total of $80 ($1,000*8%) of interest per year for the next 10 years. Actually, because most bonds pay interest semi-annually, you'll receive two payments of $40 a year for 10 years. When the bond matures after a decade, you'll get your $1,000 back. 

Mutual Funds- A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund. 

Investing for retirement Pension plans- Company plans that provide

retirement income for their workers. One of the most common is a 401k plan, in which you allow a certain portion of your check to be withheld, and often the company matches a portion of that amount.

Social Security

Individual Pension Plans

Keogh Plan- retirement plan that allows self-employed individuals to save a maximum of 15 percent of their income and deduct that amount from their yearly taxable income.

Individual retirement account (IRA)- private retirement plan that allows individuals or married couples to save a certain amount of untaxed earnings per year with the interest being tax-deferred.

Roth IRA- Private retirement plan that taxes income before it is saved, but does not tax interest when funds are used at retirement.

Real Estate as an Investment

This can be risky. What are the risks/rewards?

Spreading your investments

Diversification- spreading of investments among several different types of accounts to lower overall risk.