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PERSONAL FINANACE

PERSONAL FINANACE. You might use these:. Cash Checkbook Charge Account. Soon you will have these. Savings Accounts Debit Cards Credit Cards. What’s the ‘Big Deal’?!. Cash. Government issue Set value Based on economy Smallest denomination = penny Largest denomination = $100 bill.

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PERSONAL FINANACE

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  1. PERSONAL FINANACE

  2. You might use these: • Cash • Checkbook • Charge Account

  3. Soon you will have these • Savings Accounts • Debit Cards • Credit Cards

  4. What’s the ‘Big Deal’?!

  5. Cash • Government issue • Set value • Based on economy • Smallest denomination = penny • Largest denomination = $100 bill

  6. How to Make Change • Count up!

  7. Checking Account • Money is in bank, you must write a ‘permission’ slip to another person to access that money. • Not a guarantee of actual money • If you write an ‘overdraft’ check, bank can charge you extra money ($30-$35) • Some banks charge an annual fee to have a checking account • No interest earned

  8. How to Balance a Check Book • Use me as an example  • Homework for 10 points as well!

  9. Charge Account • Intro to Credit • A promise to pay what you spend, later.

  10. Investments and Savings

  11. Build a “Portfolio” • Collection of Savings and Investments • Worth money on a “Stock Market” • Not physical cash or objects!

  12. Stocks • Pieces of a company that you can own • Each piece is called a ‘share’ • If the company makes a lot of money, they give the extras to ‘share-holders’ • This extra bonus is called a ‘dividend’ • Value of a share goes up and down based on expected profits and losses • Each time Apple releases new tech, shares go UP!

  13. Bonds • Pieces of a government you can own • Pay some amount of money now, based on a good economy, the value of that share will go up. • Life span can be anywhere from 7 to 25 years • Treasury notes, war bonds, savings bonds

  14. Commodities • Pieces of agricultural harvest: bushels of wheat, pork bellies, fall calves, etc. • Should not be considered a long term investment! • Often times there is no return on money unless you are going to use it (buy corn to feed your cattle with) • Some places count oil and gold as a commodity because they are physical and tangible items to be bought and sold.

  15. Loan • Sometimes you need to take out a loan to pay for an investment: car, house. • Will end up paying interest on a loan • Example: My car cost $11,000 but with interest I will end up paying $13,000 for the car. • Sometimes you need to hedge your loans with other investments! • Risky investments that are worth a lot of money?

  16. CD’s • Stands for “Certificate of Deposit” • Investment of cash you make with your bank • Expect under 5% interest gained back on investment • Money cannot be touched for a minimum of 6 months (1.4%) or longer (5 years @ 4.5%)

  17. Savings Account • Invest your money at a local bank/credit union • Paid interest on very LOW risk investments (dividends!)

  18. Where do I go for advice? • “Talk to Chuck” – Charles Schwab • “Making Sense of Investing” – EdwardJones • E-Trades.com • T. Rowe Price • Northwestern Mutual • there are a gazillion other reputable places to ask for advice for free and pay an investor to handle your money for you

  19. The Stock Market Game • Your team has just been given $100,000! • How will you use it? What kind of portfolio are you going to build? We will keep track of this every week until October 23. The winning team at the end will be the team with the most money in their portfolio. • We use the real-life data from real stock exchanges over real-time (no skipping into the future by 25 or 50 years). • You are in charge of calculating interest gained and stock fluxuations for your whole $100,000!

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