The “Rule of 72”• 72/Rate of Return = Years it takes to double your investment. – Example 72/6% = 12 years to double 72/12% = 6 years to double A $2,000 investment, with a return of 12%, will equal $4,000 in 6 years. There can be no guarantee that any investment will double in any period of time. The Rule of 72 is a mathematical concept and is not illustrative of any specific product offered by UVEST. It is important to note that the Rule of 72 does not guarantee investment results or function as a predictor of how your investment will perform. It is simply an approximation of the impact a targeted rate of return would have. Investments are subject to fluctuating returns and there can never be a guarantee that any investment will double in value.
Stocks: Sharing a CorporationStocks are pieces of the corporate pie. When you buystocks, or shares, you own a slice of the company. Common Stock Preferred Stock •Owners share in •Dividend payment success when has priority over common company profits. stock dividends. •Owners at risk if •Dividends don’t increase company fails. if company prospers.
Bonds: Financing the Future Bonds are loans that investors make to corporations and governments. The borrowers get the cash they need while the lenders earn interest. Investors Corporate Bonds Willing to Lend Money U.S. Treasury BondsInvestor gets Municipal Bondspar value at maturity Bond Matures
Mutual Funds: Putting It Together A Mutual Fund is a collection of stocks, bonds, or other securities owned by a group of investors and managed by a professional investment company. How Mutual Funds Work? A large number of people with money to invest, buy shares in a mutual fund. Money Goes To The Their Pooled Money Has Fund Manager Invests the MoneyMutual Fund Company More Buying Power In a Collection of Stocks, Bonds or Other Securities
Summary• Time is on your side. The sooner you begin saving, the quicker you can make your dreams come true. No amount is too small to get started.• Consistency is the key to building your savings. What you save isnt as important as the need to regularly sock something away. Always pay yourself first. A good habit is to save at least 10 percent of everything you earn.• Dont put all your eggs in one basket. Think long term for your future goals--college, a home, retirement--and short term for other expenses. This way you wont be tempted to dip into your retirement fund for things like car repairs, clothes, or whatever else may come up.