1. Bellringer
You don’t have to write
this down:
1.How old will you be
in 2061?
2.Do you think
$13/hour is a lot of
money?
3.Get out your notes
2. 10 richest people in the World
Forbes (2012)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Carlos Slim Helú $69 B
Bill Gates
Warren Buffett
Bernard Arnault
Amancio Ortega
Larry Ellison
2, 3, 6
Eike Batista
Stefan Persson
Li Ka-shing
Karl Albrecht
8
1
4
5
9
7
10
3.
4.
5.
6.
7.
8. Credit Cards
• Loan from the
bank
• High interest
rates
• Keep control
• Bankruptcy
• Video clip
9.
10. Chances are….
Only 3% of the US earns
over $250,000/year
You will work
You will have a limited
supply of wealth
You will need to think
about your income and
make good choices
You need a budget
You need to think about
investing
11. Do you want to be?
• Rich & Retired
Social Security
12. Specifics about investing
• Opportunity cost of
investing?
• Things to consider:
– Liquidity
– Risk
– Diversify
16. Savings Account
• Low interest rate
• No risk in USA
• Today: 1%, yuck! Money Market Acct 3-3.5 %
17. Pension Plan
• Employee plan
• Usually union or large
firm
• For example: 10% from
State employees, 80% of
salary when you retire,
after 30+ years
• Not liquid at all
• Low risk, long term
18. Bonds
• Issued by
government or
large corporation
• Low risk, low
return
• Must wait for
maturity
• Can be traded
(liquidity!!)
• WW1 & WW2 War
Bonds
19. Mutual Funds
• Managed stocks
• Lower risk, lower
control
• Some sort of
theme
• Saves you time
20. Traditional IRA
• Individual
Retirement Account
• You have to set it up
• You can deposit up
to $5000 per year
• (into mutual funds,
stocks or bonds)
• Tax loopholes
(breaks)
• Can’t touch until 60
• Not liquid
At 10% interest, a $5000 IRA
becomes $226,000 over 40 years!
$10,000 is over $400,000!
21. Roth IRA
• Individual
Retirement Account
• You have to set it up
• You can deposit up
to $5000 per year
• (into mutual funds,
stocks or bonds)
• No tax break, but tax
free when you retire
• Can’t touch until 60
• Not liquid
At 10% interest, a $5000 IRA
becomes $226,000 over 40 years!
$10,000 is over $400,000!
22. 401 K Plan
• Set up by employer
• Payroll deduction
• Invested into stock
market
• Lowers tax incidence
• Tax break for
employee
• Employee match
• Not liquid
24. Real Estate
•
•
•
•
Risky, high capital
Relatively liquid
Speculation
Average real estate in
Tucson in 1970
$23,000
• Average real estate in
Tucson in 2008
$161,000!!!
