Saving and Investing Essay Sample
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Saving and Investing Essay Sample
1. Describe a real or made up but realistic situation that could cause you or someone you know to have to use money from a financial reserve. (3-6 sentences. 2.0 points) I babysit two kid for parents that work during the day so if one of the lost their job I would lose mine, If I saved up a financial reserve then I might have to use it to pay for my phone bill or for clothing I need.
2. How many months’ worth of expenses do you think your financial reserve should include? Describe at least two reasons for this decision. (3-6 sentences. 2.0 points) I think I would only need about a month or two because I think I could get another job pretty fast and also I do not have many expenses.
3. Would you rather have a savings account that offered simple interest, or an account that offered compound interest? Why? (3-6 sentences. 2.0 points) I would rather have a saving account that offered compound interest because I would be making more in the long for due to the fact that this type of interest account adds interest to the interest from the past year. A simple account adds the same amount every year, when a compound adds more every year.
4. If you were opening a savings account with compound interest, would you prefer an account that offers annual compounding, quarterly compounding, or daily compounding? Why? (3-6 sentences. 2.0 points) Daily compounding because this would add more interest to add interest on.
5. Which strategy for saving do you think would work best for you? Why? (3-6 sentences. 2.0 points) A saving account that would help me add on to my money so I wouldn’t have to pay in every paycheck but I can.
6. Describe two financial goals that you would want to meet before you begin investing. Explain why you would want to reach those goals first. (2-4 sentences. 2.0 points) You would want to save up a good amount of money so you could invest in larger products or companies. Also you would want to have some money put back you that you can be sure you’ll be okay if an investment goes bad.
7. Describe at least two factors of an investment that you would want to consider before putting money into that specific investment. (2-4 sentences. 2.0 points) How much you think this product will stay strong any how much you think other people will like it too. Also you would want to know how much you trust the person or company you are investing into you so you do not do a bad investment.
8. Calculate the return on investment in dollars and as a percentage for an investment that you purchase for $500 and sell for $600. (2.0 points) TIP: If you don’t remember how to calculate return on investment, review the Calculating ROI pages in Section 4, Lesson 2. If you took a $500 purchase then turned it into $600 this mean you would get about .84% profits.
9. Describe two examples of debt investments. (1-2 sentences. 1.0 points) The US treasury is the biggest debt investments also investing in companies like Walmart but this may raise or lower at any time.
10. Describe two examples of equity investments. (1-2 sentences. 1.0 points) Investing in real estate is one of the many examples of equity investments also investing in commodity like an item that needs to be invested into to make people see and want it.
11. If you were a new investor who wanted to invest in stock, would you prefer to invest in registered public stock, or unregistered private stock? Why? (2-4 sentences. 1.0 points) Registered private stock, because this has a lot more rules or regulations to keep your money safer.
12. Describe an alternative investment that you might invest in someday, and explain why this investment is appealing to you. (2-4 sentences. 2.0 points) If there is a new product that came out but nobody knows about it because the inventor has no money for a commercial and I really like this product I will invest in this product to get commercials and invest so the inventor can make more.
13. Describe at least three other investments you want to make with your income either now or someday in the future. Explain why you think these particular investments would be good choices. (3-6 sentences. 3.0 points) Investing in stock shares that may pay me a good amount later I the future. Also I would invest in a new company to get them on their feet so they can start to gain money. I would also want to invest in a savings account that would pay me over time.
14. Describe two types of investment accounts that you might use in the future. For each type of account, list at least one reason why the type of account might be useful to you. (2-4 sentences. 2.0 points) Investing in stock in a company is something I may do in the future because I can sell this stock anytime whenever it is at high dollar. Also investing in my money in a bank and allowing them to use my money to make more is something I may also do in the future because this will help the bank and me make more money.
15. Search online to find information about a stock’s performance, and then provide the information below. You could choose a stock such as Amazon.com or Google, or you could choose another stock that interests you. TIP: Morningstar.com or Yahoo! Finance (finance.yahoo.com) are good sources of stock information.
a. The date you collected this information. (0.5 points)
b. The website where you collected this information. (0.5 points) Www.google.com
c. The name of the company you chose (0.5 points) Amazon.com
d. The stock’s ticker symbol (0.5 points)
e. The 52 week high (0.5 points) 407.05
f. The 52 week low (0.5 points) 288.32
g. The Yield percentage (0.5 points) 1.02 (0.34%)
h. The Volume of stock sold (0.5 points) 3,032,277
i. The stock’s value at the close of business (0.5 points) 302.86
j. The net change in the stock over the course of the day (0.5 points) 307.22 to 303.11
16. Describe an example of an equity investment that can also produce income. (1-3 sentences. 1.0 points) Real estate where you invest in it and collect rent monthly.