other investment options?
• investing = putting your money
somewhere you have a chance to make
• varying degrees of risk.
• why not just keep your cash in a shoebox
under your bed?
• Type of mutual fund that tracks the
entire stock exchange.
• Less risky because risk is spread
out across many stocks.
• Maintenance fees = low which
means more money for you.
• What is it?
– An IOU from a company or government that
promises to pay you back what you paid +
interest after a certain amount of time.
• Companies do it to raise money.
• Stocks = equity, bond owners = creditors.
401(k) and Roth IRA
• Retirement accounts
• “Buckets” for other investments
• Tax beneﬁts
• 401(k) = possible “free money” if your
today’s take away message
• the stock market is one place you can
invest your money.
• index funds are probably the best way to
invest in stocks.
• bonds are relatively secure places to put
• larger the risk, larger the return.
exit ticket: review quiz
1. To own stock means that…
a.) You have an ownership claim.
b.) You are entitled to some of the company’s
c.) You are investing your money.
d.) All of the above.
2. A company sells stock to…
a.) Unload unproﬁtable assets.
b.) Raise capital.
c.) Only the executives of the company.
d.) Consolidate ownership among a few
3. The New York Stock Exchange…
a.) is an example of a large auction ﬂoor.
b.) is a new phenomenon.
c.) is where people go to open bank
d.) is actually located in New Jersey.
4. The higher the risk involved with the
investment, the _________ the likely
c.) likely return is unaffected by risk.
5. Which type of investment has the
a.) Junk bonds.
d.) Day trading.
6. Index funds are….
a.) A mutual fund made up of stock from
across the stock market.
b.) A single group of stock from the
c.) Very risky investments.
d.) Only bought by very experienced
7. Bonds are…
a.) A loan to a government, company, or
b.) Relatively secure investments.
c.) Repaid with interest.
d.) All of the above.
8. 401(k)’s and Roth IRA’s differ from
stocks and bonds in that…
a.) They are extremely risky.
b.) They provide very high returns.
c.) Are actually just “buckets” that hold
other types of investments.
d.) None of the above.
Consumer Credit &
Being Responsible with Credit
Cards and What Might Happen If
• To understand how a credit card works
and how it can be both a useful and
what is credit?
• the loaning of money.
• when you borrow money from somebody
with the promise of paying them back
later, they are giving you credit.
• your credit score is a number that
creditors look at when determining
interest rates for loans.
• it says how likely you are to pay back the
• the higher your score, the better interest
rates you can get.
• what criteria do you think they look at
when determining your score?
using a credit card like an
• rule of thumb: the less of a balance you
carry, the better.
• why? paying interest.
• a credit card is not “free money.”
• using it to buy something you can’t afford
is a terrible idea.
bankruptcy: starting over?
• a legal procedure to eliminate your debt.
• destroys your credit score for many years.
• discharges most debt.
• chapter 7 & chapter 13.
• commonly known as “liquidation.”
• allows ﬁlers to give up assets in exchange for
discharge of their debts.
• used by people with very little assets or income
and lots of debt.
• HOWEVER, won’t eliminate: student loans,
alimony, child support, debts incurred through
fraud, liabilities resulting from drunk driving &
• Also known as “debt adjustment.”
• Allows individuals to temporarily halt
foreclosures and collection actions while
they draft and execute a plan to repay
some or all of their debts over a 3 to 5 year
• Credit card companies want you to carry a
balance and therefore have to pay interest.
• Careful use of credit cards is important.
• Bankruptcy is a last resort for regaining
control over your debt.