...WHAT YOU NEED TO KNOW DETERMINANTS IN INVESTING: Americans in the work field are faced with a lot of challenges when it comes to saving for retirement. You don’t want to be too cautious (relying on just treasury bills that have barely kept up with inflation the last 70 years being an extreme example.) You don’t want to put too much weight into your stocks making your portfolio too risky and possibly jeopardizing your earnings and prolonging your retirement date. Your ability and willingness to take risk directly relates to your expected returns. A lot of factors go into your ability to generate returns through mutual funds, stocks and bonds. [pic] Google images Your age also plays a role in how you will invest for your retirement. The older you are and the closer you are to retirement, your tolerance for risk in your portfolio will go down. When you are close to retirement, the last thing you can afford is losing your savings. If you are younger and are many years away from retirement you will be more inclined to put more weight into stocks because if the market takes a downturn you have more time to recover your losses. Whether you are employed or not determines your willingness to take risk in terms of your ability to replace financial losses that may occur with your active income. Also an often overlooked factor that comes with investing for retirement is your psychological ability to tolerate the stress of a serious downturn in the...
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...Question 2 10,000 (1+0.12)^20 96,462.93 As the rate of return increases, the future value of the “handout” would increase. Question 3 A savings account as outlined in question 1 is opened by fixed salaried persons who want to earn fixed interest income on their salary savings. There are quite a lot of advantages of opening a savings account as follows: * It encourages saving habits among the fixed salaried persons. * http://www.itsallaboutmoney.com/did-you-know/why-to-open-a-savings-account/ * There is certainty to the investors as to what amount of money would be available in the account at a specified date in the future. * Account holders can preserve the money in savings accounts for emergencies because saving accounts avoid the market fluctuations that are a feature of other investments such as stocks and shares. On the contrast, saving accounts offer some disadvantages as well: * The interest rate earned on savings accounts is lower than other investments such as stocks and shares and after accounting for taxes, the income falls below the inflation level and the purchasing power will decline. * Banks always charge different kinds of fees on savings accounts such as maintenance fee or ATM fees which eats away the investment and interest income. http://www.itsallaboutmoney.com/did-you-know/why-to-open-a-savings-account/...
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...dream is not dead, but is yet attainable through genuine desire, hard work, and saving and investing. As it was coined decades ago, the American dream had a totally different meaning than its understood definition in the new age. As stated in an article, the term “American dream”, coined in the 1930s during the depression, was originally defined as a place where life would be better...
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...Advantages of investing at a young age 2/7/2012 Introduction Investing is the proactive use of the money that a person already has to make more money from it or alternatively investing refers to as to how the money works for the holder. The concept of is different from the concept of saving as saving refers to the passive use of the money with the safety of principal being the major requirement, on the other hand, investing refers to proactive and a bit aggressive use of the money to earn return on investment. It is never too early to start investing in things which help to earn profit, and by earning that profit it will be easier to do if one gets an early start in life. As a young investor i can remember quite vividly how easy it was for me to invest in a business which started out small but began to grow as business got better. The decision to invest my earnings was not easy, but as I think things through I came to a conclusion, if I was to invest into this company and business start to enlarge, then I can make a huge profit off it. In fact making that decision to invest was a bit hard but the realization is that investing at a young age may not always be easy, but the advantages of it are numerous and can be overlooked by simply having a money management plan which can help individuals build a better future and have peace of mind. The major advantages of starting the investments at a early age includes better money management, peace of mind and building of a better...
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...In the United States, a society plagued by capitalism, investing has become a way of life. To most Americans it begins with opening a savings account and slowly allowing that money to grow through the compounded interest rate over the years. While it may not seem like a big step in generating more income, nonetheless, this is a positive movement in the market of investments. With the many types of investments available knowing which are reliable, or safe, or yield good returns, are just some of the questions on the investors mind. Within each asset class there are investments to suit different kinds of risk, duration, returns and liquidity. Bank savings account, as stated before, is the simplest kind of short-term investment. The returns on savings account are low when compared to other investments, but the returns are guaranteed by the supplier, in this case the bank. Banks offer security meaning if a bank was to go broke the federal government through the FDIC (Federal Deposit Insurance Corporation) insures your bank deposits of up to $100,000. Having guaranteed returns means an investment will not lose its value in the short term unlike other investments. The bank pays interest to you account for saving your money with them. Bank fixed term investment also known as certificate of deposit is when you deposit a sum amount of money for a set period usually three, six or twelve months. The money becomes locked away for the fixed term but, in return, you get a higher interest...
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...has made investing much more user friendly than in the past. With the Internet, you can now get detailed instructions on why you should invest, the risks versus the rewards, what type of investments are right for you, and how to get started. There may be many different reasons why you haven’t jumped on the investment bandwagon. There are many more, however, why you should. A lot of people feel that investing is something that you have to be a genius to do, or that if you didn’t start early, it’s too late. This isn’t true. Anyone can invest; it can be as simple as opening a savings account. There are people that do all of the research for you, and unless you are going to a full service broker, there are no fees. Also, it is never too late to invest. There are investment options out there that are tailored to your needs and situation, no matter what they may be. The current market makes now the perfect time to start investing. With the market hitting an all time low, the price of stocks is down considerable. If you buy now, when the market goes back up, your money will have an even greater chance at potential growth. Like everything else in life, there are risks in investing, stock markets plummet, and companies go bankrupt. However, you are all but guaranteed to make money in the stock market. You are actually at a greater risk of losing money by leaving it in a savings account, than investing that money. Thanks to inflation, $100 left sitting in a bank savings account for...
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...Ways of Saving Money In our world everything revolves around money. Whether that means total amount of money you have or assets you own, money is main factor that decides what you can and cannot do. For example, people with lots of money can afford to splurge on things like fancy cars or exotic vacations. On the other hand people who are poor are often struggling to put the next meal on the table to provide for their families basic needs. It is often assumed that people who own nice things and go on vacations can do so simply because of the career they have of the family they were born into. This is not always the case, in fact the key to some people’s money woes can lie with the fact they do not have any money saving strategies. Three key ways to save money are: budgeting, investing, and saving. First off, an easy way to save money is with a budget system. You can set up a budget very easily by tracking how much you spend on a weekly, monthly, or yearly basis, then deciding on whether the things you are spending your money on are worth it or not. For example, if someone is spending $500 per month on fast food restaurants, that is something that may need to be removed or drastically reduced from their budget. When you have a budget it is easier to see exactly where all your money is going, and also makes it easier to set aside money for the future. Next, another way to save money is by investing. Once someone knows how much money they have and how much they...
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...s0255675 Yi Zhuojun Student number: s0248180 Diana Carolina lopez Student number: s0255675 Question 1 If the handout from government is put in a special bank savings account with 6% p.a interest compounded yearly and it will be deposited in that account for average 20 years. Thus, the amount of money at the average person’s retirement age will be the future value of the current $10,000 with 6% p.a interest compounded yearly. n is the average years for the handout sitting in the bank savings account and generating interests. i is the interest rate, which is 6% p.a in this investment. PV is the present value of the handout, which is $10,000. FV is the future value of this handout after 20years. n=64-44=20 FV=PV(1+i)n=10,000(1+0.06)20=32,071.35 In short, if this handout from the government is put in a special bank savings account with 6% p.a. interest compounded yearly, it will grow to $32,071.35 in 20 years. Question 2 If the handout from government is put into the sharemarket for 20 years with average return of 12% p.a, the amount at the average person’s retirement age will be much larger than that in a bank saving account. The amount will be the future value of the current $10,000 with 12% p.a interest compounded yearly. n is the average years for the handout sitting in the bank savings account and generating interests. i is the interest rate, which is 12%p.a in this investment. PV is the present value of the handout, which is $10,000. FV is the...
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...“Financial Management.” Please respond to the following: * Imagine yourself as the financial planner for a small company with 100 employees. Briefly describe your (imaginary) business and describe your strategy for financial planning and managing assets. * Using the same scenario, determine how you would finance a five-fold expansion of your company. Explain your rationale. My small company is Terry’s Graphics. We do all different kinds of graphic design work from designing people symbols to put onto cars, to putting graphic signs onto cars, to Christmas letters, to newsletters, etc. Our financial plan will be a document which will specify the funds, which will be needed by Terry’s Graphics for a period of time. I am going to plan by determining what funds will be required during the planning period, when will it need additional funds, and where will we obtain the additional funds from. We will have short-term assets, long-term assets, and capital investment analysis. These assets will be overseen by Terry, the CEO of Terry’s Graphics, but one of our dedicated employees will actually put together the financial plan. I would finance a five-fold expansion of Terry’s Graphics by using short-term funding options. This would include using trade credit, short-term loans, and commercial paper. If necessary, we would also use long-term financing. This would include public sale of stocks and bonds, private placements, venture capitalists, private equity funds, and hedge...
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...real estate investments in Manhattan. Of course Trump's idea skyrocketed as the average land prices increased 6,000 percent from 1973 to present day(How). His extraordinary risks with large amounts of starting capital is what made Trump a billionaire and that is the art of his deal. The purpose of this paper is to evaluate the self made man by examining Donald Trump and the prototypical set rules on how to become a self made millionaire. To become wealthy, one has to do more than just simply earn money. People have to be smart and maintain their money first off, then, the next step is growing their money. In order to grow money, first invest the money. A investor makes their potential profit through a few categories of investing being: interests from savings or dividend paying stocks, cash flow from business or real estate, and appreciation of value...
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...Investing in stocks and bonds as a Christian in the world today: Smart idea or foolish choice? What should a Christian valued person do in these scary economic times? Let’s dig deeper in the Bible to find out. God expects us to be good stewards of the money and other items of wealth that He has given to us. He emphasizes this so much that Jesus even used the parable of the talent in the Book of Matthew in the New Testament to illustrate the fact that He expects us to do something with the money God has entrusted to us. The parable makes it obvious that God doesn’t expect us to be stupid about how we use our money. Technically, it is not even our money. It is His money. Therefore, we should consider God’s will about how He wants it spent so that it is used in godly manner. The parable of the talent as discussed in the Matthew makes it perfectly clear that God doesn’t expect us to just sit idle with our money. Given that godly expectation; there are many low risk ways to invest our money. Whether we use stocks, bonds, treasury bills or a savings account; there are many ways to be a good steward of Gods money during the short time that we have it here on earth. As investors; we are not being careless with God’s money as long as we do our research and feel confident that we are investing with His Will in mind. Researching how to invest Gods money equals wise choices. Investing can be a wise choice as long as one does their research as mentioned above. Unfortunately, many Christians...
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...established by economically weak persons. This organization functions under their mutual co-operation of all the members. Specially, co-operative organization is such autonomous organization, which is established voluntarily by the group of persons for the fulfillment of the social, economical and cultural expectations with the democratic control and flow. If we analyze the history of it, we can find that it is the organization established by economically and socially exploited people from the rich businessmen. At the outset, the co-operative organization came into existence after the establishment of consumers co-operative society named as 'Rochdale society of equitable pioneers' in England by Robert Owen with the objective of saving poor people from economic exploitation, to eliminate the middlemen and to make the ideal society in October 24, 1944 A.D. After the establishment of it, such organizations were developed in Germany, Italy, France, and Japan in 1850 A.D. Sulj established a co-operative organization to save the farmers providing the loan at the lower rate of interest with the result of the development of co-operatives, International Co-operative Alliances were established in 1895 A.D. in England. "Co-operative is the form of organization in which persons voluntarily associate together as human beings on the basis of equality together as human beings on the basis of equality for the promotion of economic interests themselves[1]. " From the...
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...1.1.1: Low risk ............................................................................................................................ 4 1.1.2: Mid risk ............................................................................................................................. 5 1.1.3: High risk ........................................................................................................................... 5 1.2 Evaluate a range of investments available from banks, building societies, insurance companies and national savings. ..................................................................................................... 7 1.2.1: Bank .................................................................................................................................. 7 1.2.1: Building society ................................................................................................................ 8 1.2.3: National savings. ............................................................................................................... 9 1.2.4: Insurance company ......................................................................................................... 11 1.3 Analyze the suitability of these products for different...
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...not. Most of us can expect to have a steady income for at least the twenty years should we choose to make the military a career. You should be saving at a minimal fifteen percent of your income each month to prepare you for your future. I recommend that you save ten percent of your gross income for your retirement and the other five percent for your long-term goals. There are many benefits to be had once you start saving such as a substantial savings for your retirement, money to purchase a home, and money for your children’s education. It is often said that the average person’s savings should have enough funds to cover at least six months of your rent or mortgage. It is important for you to start saving early so that you can provide for your family in case of unexpected emergencies, retirement, and future plans. You do not want to rely on high interest credit cards or pay day loans to get you out of a situation. These will only put you further in debt. The sooner you start saving towards your retirement the better off you’ll be. Before you begin your savings plans you should determine how much money you will pay out for your monthly expenses. Next you should determine what your long-term financial goals are and develop a plan. It is always a good idea to shop around for the best interest rates before you start a savings or investment plans. Typically you will find...
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...you are ready. Moving forward I will definitely use a budget to plan my spending, to record how much I spend and to help me save money. I think putting at least 10% of your money away into savings is a good idea and good takeaway from class., because as learning from the simulation, you never know when you will need emergency money and how much of it, so being prepared is an excellent idea. I would also like to establish an amount to put into investments as apart of my budget, because investing can earn you a lot of money if your patient and willing to take some potential risks or easy...
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