Module Summary 4.1

   Investing is important because it is a way to build and maintain wealth (Goldsmith, 2016, p. 513). The three main ways to invest are through stocks, bonds, and mutual funds. Stock is when you own shares or units of a company (Goldsmith, 2016, p. 515). A bond is essentially an individual lending money to a corporation who will invest the money in a new building or something of such nature (Goldsmith, 2016. p. 516). Bonds can be purchased through companies or the government, and are considered safer/less risk than stocks, better guaranteed return, and potential added benefits such as biannual dividends (Goldsmith, 2016, p. 516). Mutual funds are essentially a small portion of several different holdings/stocks, group investments (Goldsmith, 2016, p. 517). Mutual funds are beneficial because of the affordability and diversification (Goldsmith, 2016, p. 517). Beginning investors should always research the company/stock before investing, aim to create a diverse portfolio, keep perspective, keep investing, and believe in the growth of the company (Goldsmith, 2016, p. 514-515). In addition to 401Ks/IRAs and annuities stocks, bonds, and mutual funds are also used as forms of retirement plans (Goldsmith, 2016, p. 523). When considering investments for retirement questions like how much money will I need monthly to maintain? How much money do I need to save?, and how much time do I have to acquire these funds? should be taken into consideration.

     Reference

        Goldsmith, E. B. (2016, July 29). Consumer economics: Issues and behaviors. 

       https://ebookcentral.proquest.com/lib/mcneese/reader.action?docID=4556508

 

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