Personal Finance - Investing

idk bro what even is ts

investing

purchasing assets with the goal of them growing in value and earning profit

savings

is held in bank, FDIC-insured, low risk, accessed quickly, lower potential

investing

not held in bank, not FDIC-insured, high risk, not accessed quickly, higher potential

diversifying investments

spreads investments across a wide variety of assets

stocks

share of ownership in a company

mutual funds

multiple investors contribute to a pool of money to buy a portion of a fund

ETFs (exchange-traded funds)

multiple investors contribute to a pool of money to buy a portion of a fund

index funds

tracks performance of a specific market index

bonds

loans money to the gov. or compnay in exchange for interest over an amount of time

CDs (certificates of deposit)

money is deposited into the CD and is earned original investment + interest when the CD matures

real estate

purchase of property with goal of making profit

dividend

payment made by a company to its shareholders

to purchase a stock, you’ll need…?

a brokerage account

stock broker

person or company licensed to buy and sell stocks and etc.

the two largest stock exchanges in the world…?

NYSE and NASDAQ

possible contributing factors to stock price…?

company performance, expectation for future, and dividends payments

unoffical loss or gain of stock price (before you sell it) is called…?

paper/unrealized loss/gain

divident yield equation?

annual divident per share/current price * 100

percent change/rate of return equation

current price - original price/ original price * 100

investment fund

pool of money combined from a large group of investors

actively and passively managed determines if it is…?

controlled by a fund manager or not

active or passive? mutual funds and ETFs

M- active, E- passive

min investment required? mutual funds and ETFs

M- $1000, E- no min

when are they traded? mutual funds and ETFs

M- end of day, E- anytime stock market is open

rule of 72

used to estimate the amount of time it will take for an investment to double

factors that determines retirement age…?

health, money, lifestyle

min retirement age

62

full retirement age

66 to 67

rule of thumb for determining how much money to save for retirement

10 to 12 times annual income

traditional 401k

for emplyees, $23,500 contribution limit, taxes paid with money is withdrawn

traditional 403b

for non-profit employees, $23,500 contribution limit, taxes paid when money is withdrawn

traditional IRA

for anyone who earns income, $7,00 contribution limit, taxes paid when money is withdrawn

roth IRA

for anyone who earns income, $7,000 contribution limit, taxes paid when money is deposited

pension

agreement to pay employee monthly retirement payments