Buying Stocks
Please read the below information from your MoneySKILL lesson 24. Also, please complete lesson 24 before completing this assignment. Lesson 24 will be added to the grade book
Equities, also known as stocks, have proven to be an excellent way to save for very long-term goals such as education for a child or retirement. This is likely to be in the future, in spite of a dismal stock market for much of the first decade of the 21st Century. There are two ways of investing in stocks- directly, by buying individual stocks, or indirectly, by buying managed pools of stocks, generally in the form of mutual funds or similar instruments.
Equities are shares of ownership in a business. A more common word for equity is "stock." If you own shares of stock in a company, you own a portion of that company. The advantage of owning stock in a large corporation is that most are publicly traded. This means you can buy or sell your shares at any time. Stock is riskier than bonds because stock offers no guarantees to the investor.
There are two ways in which people can make money on stocks that they own. The can be paid money by the company in form of dividends, and they can make a profit by selling their stock for more than they paid for it. This type of profit is called a capital gain.
Assignment
We completed a financial plan at the beginning of this course, and now you have an even better understanding of how to handle your finances and can better plan.
We also learned early on that there are three basic reasons to save money: emergency fund, purchases, and building wealth. For our assignment, we are going to visit Investor.gov, and use their compounding interest calculator to set a long term savings goal of 4 years or more. We will discuss more as a class.
Equities, also known as stocks, have proven to be an excellent way to save for very long-term goals such as education for a child or retirement. This is likely to be in the future, in spite of a dismal stock market for much of the first decade of the 21st Century. There are two ways of investing in stocks- directly, by buying individual stocks, or indirectly, by buying managed pools of stocks, generally in the form of mutual funds or similar instruments.
Equities are shares of ownership in a business. A more common word for equity is "stock." If you own shares of stock in a company, you own a portion of that company. The advantage of owning stock in a large corporation is that most are publicly traded. This means you can buy or sell your shares at any time. Stock is riskier than bonds because stock offers no guarantees to the investor.
There are two ways in which people can make money on stocks that they own. The can be paid money by the company in form of dividends, and they can make a profit by selling their stock for more than they paid for it. This type of profit is called a capital gain.
Assignment
We completed a financial plan at the beginning of this course, and now you have an even better understanding of how to handle your finances and can better plan.
We also learned early on that there are three basic reasons to save money: emergency fund, purchases, and building wealth. For our assignment, we are going to visit Investor.gov, and use their compounding interest calculator to set a long term savings goal of 4 years or more. We will discuss more as a class.
Response
Whether you are a freshman or a senior in high school, let's say you set a goal of saving $10,000 during the next 4 years. Use the calculator to determine how much you will need to save each month. We are going to make a wild guess and say for every year you are invested in equities, you will average a 9% return. How much money do you need to save a month? Let's say in 10 years, you want to have $100,000 saved up. How much do you need to save a month at a 9% return? Use the calculator to help you plan for your goals.
After reading the above information, please explain your thoughts on your plans to becoming wealthy. You can save a large amount of money fairly quickly if you set into place a plan. Responses should be detailed, grammatically correct, and a minimum of 150 words. Anything less will not be graded. Type your response in Microsoft Word and copy & paste to the response box below. You don't have to answer specific questions, but instead describe your thoughts in general about credit.
Whether you are a freshman or a senior in high school, let's say you set a goal of saving $10,000 during the next 4 years. Use the calculator to determine how much you will need to save each month. We are going to make a wild guess and say for every year you are invested in equities, you will average a 9% return. How much money do you need to save a month? Let's say in 10 years, you want to have $100,000 saved up. How much do you need to save a month at a 9% return? Use the calculator to help you plan for your goals.
After reading the above information, please explain your thoughts on your plans to becoming wealthy. You can save a large amount of money fairly quickly if you set into place a plan. Responses should be detailed, grammatically correct, and a minimum of 150 words. Anything less will not be graded. Type your response in Microsoft Word and copy & paste to the response box below. You don't have to answer specific questions, but instead describe your thoughts in general about credit.