Saving & Investing Notes

All items discussed are for informational purposes and not investment advice.
Consult with a financial advisor before making investment decisions.
Determine how a security fits into your investment portfolio and how decisions may affect your financial position and goals.
Nothing constitutes tax, legal, or insurance advice.
Investors should determine if a service or product is suitable for their needs.
There are risks associated with investing in securities, including loss of principal.
Past performance is not a guarantee of future performance.
Different investments involve different degrees of risk.
There is no assurance that any investment will be profitable or suitable.
Information is obtained from sources considered reliable, but accuracy is not guaranteed.
The information does not purport to be a complete description of the securities, markets, or developments referred to.

Emergency Fund
- 44% of Americans can’t pay an unexpected $1,000$ expense from savings (2024 Bankrate Survey).
Safety Blanket
Fun

Traditional Savings
- Easy to open at most banks
- Easy to move money
- Low-interest rates
High-Yield Savings Accounts
- High-interest rates
- Usually through online banks
- No branch banking access
Money Market Accounts
- Moderate interest rates
- Bank or ATM deposits available
- Higher minimum deposits
Certificates of Deposit (CDs)
- Above-average interest rates
- Available at banks
- Illiquid

Buying assets which you expect to increase in value over time.
- Stocks
- Bonds
- Real Estate
- Commodities

Retail Brokerage Accounts
- Platforms where you can buy stocks, bonds, mutual funds, ETFs, and other investments.
- Common Brokerage Platforms:
  - Charles Schwab
  - Fidelity
  - Robinhood
  - Vanguard
Retirement Accounts
- Tax-Advantaged accounts to buy investments for retirement savings.
- Common Retirement Accounts:
  - IRA
  - 401(k)

Individual Retirement Account (IRA)
- Available at most banks and online investment platforms.
- Must have income to contribute.
- Traditional or Roth Dollars.
- Wide variety of Investments.
- 2024 Contribution Max: $7,000$
401(k) Account
- Only available through the employer.
- Employer Contributions Allowed.
- Traditional or Roth Dollars.
- Limited investment options.
- 2024 Contribution Max: $23,000$

Traditional Contributions
- Pre-Tax Contribution.
- Reduces taxable income in the year of deferral.
- Investments accrue tax-deferred.
- Generally taxed as ordinary income when assets are withdrawn.
Roth Contributions
- After-Tax dollars contributed.
- Does not reduce taxable income in the year of contribution.
- Investments accrue tax-deferred.
- If the correct conditions are met, neither principal nor interest is taxed at distribution.

Stocks represent the fractional ownership of a company.
Bonds: A company or government borrows money from you, pays you a small amount of interest, then gives you back the money they borrowed.
Mutual Funds and ETFs (Exchange-Traded Funds)

Active Management
- Active Managers seek returns that are different than the market index by picking stocks or bonds for their portfolio.
- Reasons to attempt this could be:
  - Exceed market returns
  - Lower volatility
  - Increase dividends
  - ESG Management
Passive Management
- Passive management, also known as Index Investing, is a strategy that aims to equal the returns of a specified index.
- Examples:
  - S&P 500
  - Total US Stock Index
  - Barclays Agg Index