What will you do with your extra money

1
What will you do with your extra money?

• A mini lesson on spending, saving and investing.

2
After you have tracked your spending

• You have some options to consider. Where is the
  best place for your new found cash?
• Checking Account
• Savings Account
• Savings Bonds
• Certificates of Deposit
• Stocks
• Mutual Funds

3
Checking Accounts

• Here are some checking accounts available at
  First National Bank of Omaha. The titles of the
  accounts and the interest rates are shown below
• Customer First Premier 1.00
• Customer First Complete 0.75
• First at Work 0.75
• Customer First Classic 0.50

4
Savings Accounts

• Some available savings accounts at First National
  Bank of Omaha
• Customer First Premier Money Mkt
• 0.75
• Customer First Complete Money Mkt
• 0.65
• (balances 0 to 4,999)

5
Certificates of Deposit

• Interest paid on Certificates of Deposit often
  varies based on the amount of money deposited or
  the length of time it will be deposited.
• Interest Rate Term Min. Deposit
• 4.34 6 Mo. 2,500
• 3.87 12 Mo. 500
• 3.63 18 Mo. 500
• 3.39 24 Mo. 500
• 3.73 48 Mo. 500
• SourceFirst National Bank of Omaha

6
Savings Bonds

• Available at local banks and via the internet, U.
  S. Savings Bonds are another investment option
  for young adults.
• Series EE bonds can be bought at half their face
  value, and are sold in denominations of 50, 75,
  100, 200, etc.
• For example, a 50 bond would cost you 25, and
  is guaranteed to double in 20 years. (This is a
  pretty conservative investment for most young
  people.) The interest rate is currently 3.
• Source www.treasurydirect.gov

7
Stocks

• From 1926 to 2005, the SP 500 returned an
  average annual 10.46 gain.
• Risky investments generally pay more than safe
  ones (but they may also fail.)
• Investors demand a higher rate of return for
  taking greater risks. Thats why stocks, which
  are considered riskier than some other
  investments, tend to return more.
• You can open an online brokerage account easily
  at TD Ameritrade or Charles Schwab.
• Sites like these often have a great deal of
  information to help you understand buying and
  selling stocks.
• Source money.cnn.com

8
Mutual Funds

• The theory behind mutual funds is simple
• You need the advantage of being able to pool your
  money with that of a lot of other investors.
  Then, a professional manager can invest that
  money across enough investments to reduce the
  risk of being wiped out by any single bad bet.
• There are more than 14,000 mutual funds according
  to Morningstar (the mutual fund tracker.)
• Funds can be load funds, meaning a sales charge
  is imposed up front or no-load, which means that
  there are no sales charges.
• Funds can be categorized by their investment
  strategy
• Index, Growth, Value, Sector, Others
  International.

9
Learn more about personal finance at one of these
websites

• http//yahoo.finance.com

• http//money.cnn.com/pf

10
Advantages of Investing Early

• Hopefully you have been thinking of different
  ways to save a few extra dollars each day.
• A common mistake people make when saving for
  their future is thinking that there is always
  time to start contributing later.
• Even though you may have many more years of
  working ahead of you, starting to save now has a
  large effect on the value of your investments in
  the future.

11
Advantages of Investing Early

• We will take a look at a few examples of the
  effects of interest compounded over time.
• Using a few of the investment examples Teri
  discussed with you, we will determine the future
  value of those investments.
• For the purposes of our example, we will assume a
  savings amount of 20.00 per week.

12
Advantages of Investing Early

• You can see the difference investing early in
  these situations has made.
• Choose investments based on how comfortable you
  are with investing.
• Make it a point to pay yourself first to make the
  most of your money!