Maximize Savings, Investment Facts
A. COMPOUND INTEREST – the 8th wonder of the world! 1. The EARLIER you start saving – The MORE $ you will accumulate! B. FREE Money: your employer’s 401K plan – IF they offer a % MATCH! 1. you MUST contribute – but ONLY up to your Employers % Match. C. REAL ESTATE: Buy to Own, or Rent? 1. Answer: You can pay off a mortgage BUT rent goes on forever! D. STOCKS: Don’t put all of your eggs in one basket! – DIVERSIFY 1. The KEY is to accumulate the MOST “shares” of the BEST funds. 2. Do enough RESEARCH to be comfortable with your Fund Choices. 3. “Dollar Cost Averaging” - Long Term Investment Philosophy: Investing Money at constant, regular intervals: Allows you to take advantage of market dips because your Money buys MORE shares when the price is LOW and fewer when the price is high, which can mean a LOWER COST PER SHARE over time . 4. Remember: Past performance is no guarantee of future results. E. WHAT would (did) Warren Buffett DO? 1. Get scared when everyone else gets greedy. 2. Get greedy when everyone else gets scared. F. BONDS: Share Price Value & Interest Income work AGAINST each other. 1. To optimize performance, you need to TIME your entry into Bonds to be at a point when the PRIME RATE is just beginning to FALL so you can benefit from BOTH Income Generation (Interest Received) AND Capital Appreciation (Share Price Increase). The BUDGET TEACHER