Fp/120 Week 1 Assignment

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Investing your money. (The basics.) FP / 120 April - 3rd, 2012 Investing your money. (The basics.) Introduction: The traditional ways of saving money aren’t enough anymore. Over the past few years more than likely most people’s portfolios took a hard hit, their house lost its value, they may have lost their job, and all the dollars they had tucked away for a rainy day are worth less, or are lost due to the bad economy. For this, you must learn to invest your money wisely. The seven step planning process to investing. 1. Identify your investment goals. 2. Estimate the amount of money needed to achieve your goals. 3. Estimate the amount of money needed for your investment program. 4. Evaluate your risk tolerance. 5. Learn…show more content…
After paying off an expense; (like a car payment.) Use that money to invest. 5. Participate in an employer 401 K program. 6. Get a second job to help finance your investment costs. The two major ways to invest are; lend or own. 1. When you lend, you are a Debt Investor. 2. When you own, you are an Equity Investor. When you lend money you get back the interest, on top of the money you lent out. When you own, you own a commodity or a business, or part of a business. Then you become an Equity Investor. You then receive a return in the form of growth on your investment. GOOD GROWTH = LOTS OF INVESTMENTS. BAD GROWTH = LOSS OF INVESTMENTS. For new investors, stick to; Stocks, Bonds, Mutual Funds, Real Estate, or Commodities. 1. Stock; is when you buy a share or a portion of ownership in a corporation or business. 2. A Bond; is a loan amount lent to a Government, or business which pays a fixed interest rate for a fixed period of time. 3. A Mutual Fund; is a collection of investments managed by a professional investment firm, where investors can buy and sell shares of many different organizations or

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