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* Learning about Business: Buying Stocks & Bonds
 

* Learning about Business: Buying Stocks & Bonds

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    * Learning about Business: Buying Stocks & Bonds * Learning about Business: Buying Stocks & Bonds Presentation Transcript

    • Learning about BusinessBuying Stocks and Bonds
    • Business Vocabulary: Do you know what these words mean?bondbusiness expensescompanydividendloaninvestinginvestorsinterestU.S. Savings Bondprofitrisksalaryshareholdersharesstockthe Stock Market
    • In 2012, Craig and Omar were broke.They needed to earn money.They decided to sell lemonade.http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • They made up a name for their lemonade company.They called it LeMThey made up a business plan.http://www.aisquared.com/zoomnews/images/1008/money.jpg1. COMPANY--businessLeMo
    • They needed a lot of things.http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • Some things they already had.http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • They needed to buy other things…http://www.aisquared.com/zoomnews/images/1008/money.jpg2. BUSINESS EXPENSES--things you buy for your business
    • …but they had no money to buy what they needed.http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • Craig told his friend, Maggie, he needed money for LeM .Maggie said, “Do you want a loan? I will lend you and Omar $100.Pay me back later.”http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • Craig told his friend, Maggie, he needed money for LeM .Maggie said, “Do you want a loan? I will lend you and Omar $100.Pay me back later.”http://www.aisquared.com/zoomnews/images/1008/money.jpg3. LOAN--money you borrow
    • Craig told his friend, Maggie, he needed money for LeM .Maggie said, “Do you want a loan? I will lend you and Omar $100.Pay me back later.”http://www.aisquared.com/zoomnews/images/1008/money.jpg3. LOAN--money you borrow
    • After Maggie loaned Craig and Omar themoney, they gave her a paper called an IOU.They wrote on the paper, “Next year, we willpay back Maggie $100 plus 10% interest.”reiki.sjdr.com.brLLeMBond Certificate $110for Dynell BennettAnother name for an I.O.U. is a bond.Next year, Maggie will earn an extra $10when he ‘cashes in’ his bond for LeMo.interest = extramoney. Charli &Sergei will payinterest becauseDynell helpedthem when theyneeded money.4. INTEREST--extra moneyDynell paid$100 for thebond, but nextyear, he will getback $110.
    • reiki.sjdr.com.brDynell paid $100 for thisLeMoo Bond Certificate.After 1 year, it will beworth $110.Lending money to a business iscalled ‘buying a bond.When you buy a bond from abusiness, the business promises topay you back with interest after acertain time.LLeMoBond Certificate$1105. BOND--money you loan to abusiness
    • reiki.sjdr.com.brPiggy Bank v. Bond Certificate2011 2012 2011 2012$100 $100 $100 $110LeMoBond Certificate$110
    • reiki.sjdr.com.brPeople like to give U.S. SavingsBonds to babies.This U.S. Savings Bond costs $50.The U.S. government promises topay you back $50 + interest.After 20 years, when the baby is incollege, the bond will be worth$100.Buying a bond is a way to save and earn money.When you buy a bond, you are lending someone money.They promise to pay you back the money plus interest.6. U.S. SAVINGS BOND--money you loan to the UnitedStates government that pays youinterest.
    • Craig and Omar needed more money.Craig talked to his friend, Anwar. She read Craig and Omar’s businessplan.http://www.aisquared.com/zoomnews/images/1008/money.jpgAnwar offered them $50 for their business.She said, “Don’t pay me back. I think you have a great idea and a goodplan. Instead of paying me, let me be your business partner.”
    • reiki.sjdr.com.brCraig and Omar thought having a business partner was a good idea.Craig wrote on a paper:“LeM establishes 100 shares of stock.“We sell Anwar 50 shares of LeMo stock. ”Huh?What is stock??What are shares?
    • reiki.sjdr.com.brCraig and Omar thought having a business partner was a good idea.Craig wrote on a paper:“LeM establishes 100 shares of stock.“We sell Anwar 50 shares of LeMo stock. ”Huh?What is stock??What are shares?
    • Suppose LeM was a pie.
    • Suppose LeMo was a very large pie cut into 100 slices.Each slice is a share.The pieis LeMstock.7. STOCK--money in a business
    • Suppose LeMo was a very large pie cut into 100 slices.The pieis LeMstock.Craig and Omar ownthe other 50 shares.8. SHARE--a piece of a businessMaresangely paidfor 50 shares.
    • reiki.sjdr.com.brMaresangely paid $50 forshares in LeMoo Stock.If LeMo makes profits,Maresangely will earnmoney because she is ashareholder.LLeMoStock Certificate50 Shares9. SHAREHOLDER orSTOCKHOLDER--a person who owns a part of abusiness and shares profits.
    • reiki.sjdr.com.brLLeMoStock Certificate50 Shares10. RISK--you may win or you may lose.Anwar accepts a risk.LeM does not promise to pay her money.When Anwar became a shareholder, she may earn money orshe may lose money.Anwar thought investing in LeMoo was a good risk.http://www.theproducersperspective.com/my_weblog/2009/05/how-to-invest-in-a-broadway-show-part-ii.html
    • People love LeMo. .Craig’s and Omar’s business is successful!They sell a lot of lemonadeand their business earns a lot of money.http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htmAfter one year, LeMo earned $500.They cannot keep all of the money.Craig and Omar must pay business expenses.
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.150 = buying lemons, paper cups, stand
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Craig ($50) & Omar ($50) for working.11. SALARY--paycheck for working atyour job
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Craig ($50) & Omar ($50)
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Craig ($50) & Omar ($50)250
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Craig ($50) & Omar ($50)250-110 = Maggies Bond (+ interest)
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Craig ($50) & Omar ($50)250-110 = Maggie’s Bond (+ interest)140
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Craig ($50) & Omar ($50)250-110 = Maggie’s Bond140 PROFIT
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Kenya ($50) & Charli ($50)250-110 = Dynell’s Bond$140 PROFITCraig & Omar together own 50 shares.Together, they earned $70; each earned$35.00Anwar owns 50 shares.She earned $70.00.Craig & Omar must pay Anwar her share inthe profit.$35$7012. PROFIT --extramoney you earn afterpaying business expenses$35
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htm$500 = total earnings, 2010 – 2011.- 150 = buying lemons, paper cups, stand350- 100 = salary for Kenya ($50) & Charli ($50)250-110 = Dynell’s Bond$140 PROFITThe money you earn from investingin business is called a dividend.$70 $7013. DIVIDEND--business profits shareholders(investors) earn
    • Anwar kept her dividend.http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • Craig and Omar used their dividend for their business.http://www.aisquared.com/zoomnews/images/1008/money.jpg
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htmBusiness earnings go up and down.
    • http://finance.yahoo.com/tech-ticker/the-government-has-destroyed-business-confidence-former-fdic-boss-isaac-says--but-help-is-on-the-way-535426.html?tickers=^dji,^ixic,^gspc,xlf,SKF&sec=topStories&pos=9&asset=&ccodeSome businesses are not successful.Business owners and stockholders may lose their money.
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htmBusinesses are successful when they find out what customers want.Businesses must always make changes to match their customers needs.
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htmAnwar was very happy that she earned a dividend.She became interested in investing more money in business.14. INVESTING--buying something now that willearn more money in the future.http://www.google.com/imgres?imgurl=http://unexpectedprofits.com/wp-content/uploads/2010/09/Knowing-where-to-invest-your-money-will-benefit-your-business.jpg&imgrefurl=http://unexpectedprofits.com/better-investments/where-to-reinvest-unexpected-profit-for-maximum-results/attachment/knowing-where-to-invest-your-money-will-benefit-your-business/&usg=__SoLTGjHbqyAK7xHsYnmZPBvdmhE=&h=418&w=586&sz=39&hl=en&start=5&zoom=1&tbnid=L1tQ5vnr_7x46M:&tbnh=96&tbnw=135&ei=G_OJTfOAKJKztwfHj_jcDQ&prev=/images%3Fq%3Dinvest%26um%3D1%26hl%3Den%26safe%3Dactive%26client%3Dfirefox-a%26sa%3DN%26rls%3Dorg.mozilla:en-US:official%26biw%3D1141%26bih%3D561%26tbs%3Disch:1&um=1&itbs=1
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpgA house is a very good investment.Most of the time, you pay a low price for a house.After many years, the house is worth more moneychttp://www.zoomstart.com/buy-low-sell-high/$100,000How muchyou paid forthe house in2011.How muchyou earnedselling thehouse in 2021.$165,000
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htmThe Stock Market is where people buy and sell business shares.15. THE STOCK MARKET--where people buy and sell shares inbusinesscorbisimages.comThe New York Stock Exchange on Wall Street in NewYork City.
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpgThe goal of investors: Buy low, sell high.chttp://www.zoomstart.com/buy-low-sell-high/16. INVESTORS--people who buy stocks, bonds, housesand other things that will be worthmore money in the future.
    • http://mindmillion.com/MONEY/cartoon_money_dollar.htmInvestors must be careful about making decisions.He just lost alot of money.
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpghttp://mindmillion.com/MONEY/cartoon_money_dollar.htmhttp://boagworld.com/season/1/episode/1/Investors must learn about the business and understand the risks.
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpgIf a business is successful, investors can earn a lot of money.
    • http://www.fordham.edu/images/admin_offices/hr/administrator%20paystub%20image.jpgIf a business is not successful, investors can lose a lot of money.
    • If you can wait a long time, many investments increase their value.
    • If you can wait a long time, many investments increase their value.
    • Business Vocabularybond –lend money, then earn back the money plus interestbusiness expenses –things you must buy for your businesscompany –a businessdividend – business profits shareholders (investors) earnloan –money you lend a person or a company. They will pay it back.interest –extra money you earn from saving or lending.investing –buying something that will earn more money in the future.investors –people who buy stocks, bonds, houses & other things thatwill be worth more money in the future.U.S. Savings Bond –money you lend the government.profit –extra money you earn after you pay business expenses.risk --you may win or you may losesalary –money you earn from workingshareholder – a business partnershares –pieces of a businessstock –money in a businessthe Stock Market –a place to buy and sell business shares
    • Finis