INTRODUCTION TO INVESTMENTS HOW TO CREATE WEALTH? + Avoid or Pay off debt + Invest > Diversify + Multiple revenue streams + Wise spendingINVESTMENT on |AN INVESTMENT IS. AN ASSET OR ITEM IN FINANCE, AN INVESTMIENT IS A sTHE TERN "INVESTMENT" CAN REFER TO. ACQUIRED WITHTHEGOAL OF GENERATING MONETARY ASSET PURCHASED WITH THE ANY MECHANISM USED FOR GENERATING INCOME IN THE FUTURE OR WILLLATER BE SOLD AT AHIGHER PRICE FOR APROFIT. Na MANAGEMENT It is more than just ue eo) ur eee eeu Mca Pease at POs ede) Perea sce Si ec ace ae) Brel merle Pee nie mee CN a ae See A Lae Mag ect ee m CY ceoaN MAXIMIZATION Although money can earn interest, the buying power may be offset by the inflation rate. Interest rate - Inflation rate = A Buying PowerINFLATION t Price of goods and service {Purchasing power y {Value of money SC“ :SSSCis CAUSES OF INFLATION Spending by consumers and the public Higher disposable income Market confidence Increase in aggregate demand and low supply Other external factorsHOW TO BEAT INFLATION? INVEST ee RISK e The chance that an investment’s actual return will be different than expected. +RISK = TRETURNRISK SYSTEMATIC UNSYSTEMATIC Inherent uncertainty in the| Uncertainty of the market. company. tAlso called market risk or, *Can be reduced with) undiversifiable risk. proper research. *Diversifiable risk. ee RISK MANAGEMENT e Risk tolerance ~ the amount of risk that an investor is comfortable taking or the degree of uncertainty that an investor is able to handle. e Risk Appetite — the level of risk that an organization is prepared to accept in pursuit of its objectives, before action is deemed necessary to reduce the risk.DIVERSIFICATION + Spreading investments to minimize risk. + Portfolio - a collection of all your financial assets. TYPES OF INVESTMENTS| TIME DEPOSIT ‘A bank placement with the holding, Off 30 days and above itearns interest relatively higher than a savings account. Certificate of time deposit is issued as proof of ownership of the Holder, © the face specifies the date of maturity, name of the Holder, and the amount of placement ‘The funds placed on their time deposit is restricted from withdrawals.SAVINGS ACCOUNT + One of the most conservative forms of investment. + Investor places the funds to the bank in exchange for interest. + Withdrawals can be made over-the-counter or through ATMs. + Itmay bea joint oran individual account. © Joint accounts—with two or more signatories © Individual account one signatory N.O.W. ACCOUNT « Negotiated Order of Withdrawal . Has the combined features of a savings account and a demand deposit. + Withdrawal is made in the form of a check.BISON Abs) ANDTREASURY BONDS BONDS c=) 11 LeU) fel) in (ola tte) Lon aur) oye Mig] Bonds — long-term fo) -eae (ela Teer) Los aad Fv eua lu Teele Mi Ras eae Ral meal traded on discount basis, i.e. it earns ialetecim ald Raa Muir levlgiayae (Lem These types of investments are practically risk-free because the government guarantees its payment. Bonds are long term debts where a borrower agrees to make interest payments during the life of the loan and then repaid the principal amount at maturity date. As compared to stocks, bonds are less risk.Reese eeu a Cry emer Buying a company's stock makes one a shareholder of the company STOCKS There are two ways to generate retums SCTE ele aI} ee arc Deut ySTOCK TYPES According to Returns + Common Stock + Preferred Stock According to Volatility + Blue-chip + Speculative According to Purpose + Growth Stocks + Liquidating STOCK TYPES COMMON PREFERRED » Variable dividend) payments *Voting rights Preemptive rights Fixed dividend payments No voting rights *No preemptive rightsSTOCK TYPES BLUE CHIPS SPECULATIVE Stocks of well-established] Volatile stocks companies *Penny stocks STOCK TYPES GROWTH LIQUIDATING Projected to have high] *Projected to be sold. earnings relative to other| stocks.WHAT AFFECTS STOCK PRICE? News or rumors; speculations - Dividends « Board of directors or management Local and International Economy Supply and demand MUTUAL FUNDS Mutual fund is an investment vehicle whose units are not traded in the secondary markets like stocks or bonds . Investors buy directly from mutual fund companies at its net asset value (NAV) plus any incidental cost. This investment allows small investors to have an access to professionally managed and diversified portfolios each investor in the mutual fund shares the gains or losses of the fund.SSS To live in Buy and sell Rent or Lease Sell in the elton) lslo)o0)\] CRYPTOCURRENCIES + Unregulated. + Volatile. + Prone to underground activities. + High-risk.FINTECH COMPANIES Integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers ee ARTWORKS e Usually bought at auctions or galleries. e Value depends on the success of the artist