Presentation Transcript

1. Economics Unit 5Personal Finance

   Who wants to be a millionare??
2. How? Play the Texas Lotto?
3. Question 1: Are most millionares college graduates?
4. Yes 4/5 millionaires are college graduates 18% have masters 8% law degrees 6% medical degrees 6% Ph.D.
5. Question 2: Over/under 40 hours a week worked by millionaires?
6. Over. About 70% of millionaires work between 45-55 hours a week.
7. Question 3: True/False: Over half of millionaires received money from a trust fund (parents) or inherited most of their money.
8. False. Only 19% received any income/wealth of any kind from a trust fund Less than 10% inherited more than 1/10th of their wealth.
9. Question 4: Do more millionaires have American Express Gold cards or Sears cards?
10. Sears card. 28% have credit card 43% have Sears card
11. Question 5: Do more millionaires have Cadillacs or Fords?
12. Ford. Ford is preferred by 10% of millionaires Cadillac is preferred by 8% of millionaires Lincoln is preferred by 7% of millionaires Only 23% of millionaires drive a current year (new) car
13. Question 6: Do most millionaires work in big Fortune 500 Companies?
14. No. About 3/4 of millionaires are self-employed Consider themselves to be entrepreneurs
15. Question 7: Do many poor people become millionaires by winning the lottery?
16. No. Few people get rich the easy way. The chances of winning the lottery are 1 in 12 million In contrast, you have a 1 in 1.9 million change of being struck by lightling
17. Question 8: Over/under 50% more income college graduates earn over their high school graduate counterparts?
18. Over. College graduates earn 66% more than high school grads People with professional degrees earn 150% more than the average high school graduate
19. Question 9: Do day traders usually beat the stock market and become millionaires?
20. No. Recent studies suggest 80% of day traders lose money.
21. Question 10: If you want to be a millionaire, should you avoid the risky stock market?
22. No. Almost 95% of millionaires own stocks. Since 1926, stocks have increased at 11% at a compounded, annual rate of return. 11% exceeds any other type of investment. Investing in stocks does involve risk.
23. Question 11: At age 18 you decide not to drink one coke a day and save $1.50 each day. You invest this $1.50 at 8% annual interest until you are 67. At age 67, would your savings from not drinking one coke each day be over/under a quarter of a million dollars?
24. Over. It would be almost $300,000 Because of the power of compound interest, small savings can make a big difference. It pays to save and live below your means.
25. Question 12: If you save $2,000 a year from age 22 to age 65 at 8% interest, your savings will be about… How much?
26. Over $700,000 Regular saving will make you a millionaire even if your income is modest.
27. Question 13: True/False: Single people are more often millionaires than married people.
28. False. Most millionaires are married and stay married.
29. Improving your financial life: Get a good ecucation. Work long, hard, and smart. Learn money-management skills. Live below your means. Buy a home. Save early and often. Invest in mutual funds/common stucks for the long term Gather information before purchasing
30. Net Worth Assets: What you own and can exchange for value. This includes any savings, houses, cars, personal possessions, etc. Liabilities: Money you owe others. This could include mortgage, car loans, credit card, debt, student loans, etc. Assets – Liabilities = Net Worth People can have a large income and still have a low net worth if they have many liabilities.