Scribd
Upload
12 views28 pages

Identifying Personal Financial Goals PP

Uploaded by

Jessica Boettner
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
12 views28 pages

Identifying Personal Financial Goals PP

Uploaded by

Jessica Boettner
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 28

Identify Personal

Financial Goals
Lesson B6-1
Learning Objectives
 Define wealth as it pertains to an
individual.
 Create a budget.
 Describe investment and savings
strategies.
Terms
 assets  money market
 budget account
  mutual funds
certificate of deposit
  net worth
compound interest
  personal wealth
investment
  savings account
liabilities
 stocks
I wanna be rich…
 What does it mean to be rich?
 If you want to be rich, how would you
make this happen?

www.dropshipsellers.com
Personal Wealth
 an abundance of valuable material
possessions or resources.

artfiles.art.com
Net Worth
 the difference between assets (what is
owned) and liabilities (what is owed)
 net worth is wealth

www.anewgreenitude.info
Assets
 the entire property of a person,
association, corporation, or estate;
possessions that generally increase in
value or provide a return.
Savings Account
 an account that accrues regular interest on
money held in the account

www.foreignborn.com
Retirement Plan
 Examples include:
 Individual Retirement Account
(IRA),
 Simplified Employee Pension
(SEP)
 401(k) (an employer-sponsored
pension plan)

www.taxguru.net
Stocks
 capital raised by a corporation through the
issuance of shares that entitle holders to
an ownership interest) and bonds
(interest-bearing certificate of public or
private indebtedness).

www.portfolio.com
Dwelling
 Examples:
 House
 Condominium
Liability
 money that is owed (debt).
 Home mortgage.
 Credit card balances.
 Car loan.
 Medical bills.
 Student loans.
Set Financial Goals
 Set specific goals.
 Be realistic.
 Establish time frames.
 Devise a plan.
 Be flexible; goals can change.
Budget
 an estimate of anticipated income and
expenses for a certain period of time.
 Income is financial gain (earned or unearned)
accruing over a given time period.
 Expense is financial burden or outlay; cost of
goods and services.

www.winona.edu
Advantages of a
Budget
 Understand where your money goes.
 Avoid spending more than is available.
 Invest expendable income to increase
personal wealth.
Develop a Budget
 Calculate monthly income.
 Track daily and/or monthly expenses.
 Determine the amount needed to pay
monthly expenses.
 Divide annual or semiannual costs into
monthly costs.
Figuring Budget
Surplus or Deficit
 Take monthly income and subtracting
monthly costs; the amount remaining is
available for investment.
Investment Strategies
 Investment
 Compound Interest
 Savings Account
Investment
 anything acquired for future income or
benefit; to commit money in order to earn
a financial return.
 This return is from generating additional
income or by an investment growing in
value.
Examples of
Investments
 Stocks
 Mutual Funds
 Items of Value

www.mortgagessouthampton.co.uk
Investment
 anything acquired for future income or
benefit; to commit money in order to earn
a financial return.
 This return is from generating additional
income or by an investment growing in
value.
Mutual Funds

 a professionally managed form of collective


investments.
 Money is pooled from many individuals and invested in
stocks, bonds, short-term money market instruments,
and/or other securities.
 The fund manager (portfolio manager) trades the fund’s
underlying securities, realizing capital gains or losses, and
collects the dividend or interest income.
 The investment proceeds, in the form of dividends or
interest income, are then passed along to individual
investors.
Examples of Items of
Value
 Items that can be resold
 Real estate
 vehicles
Compound Interest
 the concept of adding accumulated
interest to the principal so that interest is
earned on accrued interest.
 This investment strategy helps build
wealth faster.
 The act of making the accrued interest part of
the principal amount is called compounding.
Types of Savings
Accounts
 Personal savings account
 Money market account
 Certificate of deposit
Personal Savings
Account
 an account often provided through a local
bank, savings and loan, credit union, etc.

www.womensartfestivalkingston.ca
Money Market Account
 a savings account offered by banks and credit unions and is similar to
a regular savings accounts.
 The difference is that these accounts usually pay higher interest, have
higher minimum balance requirements, such as $1000 to $2500, and
allow only three to six withdrawals per month.
 Similar to a checking account, many money market accounts allow writing
up to three checks each month.
 The money market account is insured by the Federal Deposit Insurance
Corporation (FDIC), which means that even if the bank or credit union
goes out of business, which is very rare, the money in the account is still
protected.
 The FDIC is an independent agency of the federal government that was created in
1933 because thousands of banks had failed in the 1920s and early 1930s.
 Not a single person has lost money in a bank or credit union that was
insured by the FDIC since it began.
 If the money market account is obtained from a credit union, it is insured
by the National Credit Union Administration (NCUA), a federal agency.
Certificate of Deposit
 a deposit held for a certain period of time and is a financial
product commonly offered to consumers by banks, thrift
institutions, and credit unions.
 CDs are similar to savings accounts in that they are insured and
thus virtually risk-free. CDs from a bank are insured by the FDIC.
 CDs purchased from a credit union are insured by the NCUA.
 CDs differ from savings accounts in that the CD has a specific
fixed term of three months, six months, or one to five years, and
usually a fixed interest rate.
 It is intended that the CD be held until maturity, at which time the
money may be withdrawn together with the accrued interest.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy