Foundations of Money Education Investments Why Should I Invest Investing Common Reasons for Investing Additional Notes The Rate of Return Matters Estimated required to double your money assuming a given Rule of 72 72 Years to Double Investment Example 72 Years to Double Investment How Do I Earn From Investments Investment Returns come in the form of Additional Notes 1 ex rent interest dividends etc 2 profit from sale Types of Investments 1 2 3 Why financial assets Additional Notes Risk Return Bonds You receive payments and or the of the bond at maturity Input the expected payments for this 5 Year 1 000 FV Bond 2 pays semi annually Year 1 2 3 4 5 Types of Bonds Bonds can differ based upon who the money is leant to U S Treasury Corporations Municipalities etc AAA AA A BBB and lower how the interest is calculated Fixed Floating Zero Tax Free etc Types of Bond Risk Additional Notes Stock You receive and or sometimes Diversify Your Investments Input the letter A B C etc for each term next to its description Unsystematic Risk Systematic Risk Diversification A B C The risk all securities are subject to always present A type of Risk Management The risk associated with specific securities can diversify away Correlation How an moves in the in relation to movements of other Asset Correlation Input 0 1 or 1 in the appropriate place below Perfect Negative Correlation Uncorrelated Perfect Positive Correlation Funds Mutual Funds Index Funds Managing Risk Reward The Efficient Frontier Risk Tolerance Time Horizon Label the investor risk attributes below 1 How much risk you are capable of taking with your money 2 How much risk you are willing to take with your money Asset Allocation Conservative Less Risk More Risk Aggressive More Risk Less Risk How to Start Investing Considerations when opening an investment account include Additional Notes