Investment Choices

Collectibles

-Collectibles are items that are relatively rare in items.

-Paintings, sculptures, and other works are all collectibles; as we as baseball trading cards and antiques.

-Investors in collectibles don't make a profit or loss until they sell their items.

-There's a very small market for collectibles, investors view them as very high in risk.

Real Estate

-Investors buy property, such as land or buildings, hoping to generate a profit.

-If your parents own their own home, this is real estate.

-There are many other forms of real estate investments, such as malls, appartments, underdeveloped land, commercial buildings, and farmland.

-Real estate is more eaiser to sell than stocks; you have to put it on the market, wait for a buyer, negotiate the price, and then sign a contract.

Savings Account

-Often the first banking product people use, savings accounts earn a small amount of interest.

-Because the federal government guarantees the safety of these accounts, they're considered to be very low risk.

-They tend to pay low interest rates.

-You can take your money out at anytime without penalty so a savings account is a very liquid asset, meaning it can be easily converted to cash.

Stocks

-Having stock in a company means that you own part of that company.

-A company usually begins issuing shares of stock to raise money for reasons such as buying new equipment or hiring more employees.

-Investors who buy stock are called shareholders.

-Stocks are generally risky investments than income investments because you can potially lose more money.

-Over long periods of time stocks tend to make more money than income investments.

-There's no gaurntee you'll make money.

-You can sell stocks at any time.

Certificates of Deposit (CDs)

-Banks and credit unions have their own versions of savings bonds, called Certificates of Deposit.

-When you buy a CD from a financial institution, you are loaning it money for a set period of time.

-The longer the term, the higher the rate of interest paid.

-CDs usually pay a slightly higher rate of interest than savings bonds.

-Just like savings bonds if you cash them in early you will pay a few months interest.