Invest of Success

The section offers a variety of tools to invest for success.

What is Investing?

Investing involves taking varying levels of risk and focuses on increasing one’s net worth (total assets – total liabilities) in order to accomplish mid and long-term financial goals. An example of an investment can include: stocks, bonds, and mutual funds. View Investing: A Route to Long-Run Financial Fitness for more information on investing basics.

• Worksheet 1: How Time Affects the Value of Money
• Worksheet 2: Understanding Your Personal Risk Tolerance
• Worksheet 3: How Much of a Risk Taker Are You?
• Worksheet 4: What's Your Investment Concept IQ?

 

What is the difference between risk and return?

Risk is the amount of chance you are taking when you invest in the market.
Return is the amount of profit or loss on your investment.

What is a mutual fund?

Mutual funds are a portfolio of stocks, bonds, or other securities that is collectively owned by people and managed by a professional company. View Mutual Funds and Investing Options to find out more information in regards to mutual funds and other investing options.

• Worksheet 1: What's Your Investment IQ?
• Worksheet 2: Comparing Mutual Funds
• Worksheet 3: What's Your Mutual Fund IQ?
• Worksheet 4: Stock and Mutual Fund Newspaper Listings
• Worksheet 5: Life Cycle Investing Profiles

 

What is the difference between “load”, “front load”, and “back load”?

• Load - A sales charge added to the purchase and/or sale price of some mutual funds and annuities.
• Front Load- A sales charge paid when an individual buys an investment.
• Back Load- A sales charge or commission paid when an individual sells an investment.

What is diversification and why do I want to do it when I invest?

Diversification is when you combine a variety of stocks/bonds in a mutual fund to reduce the risk of your investments.

Tax-Advantaged Investing

What is the difference between tax deferred, tax exempt, and tax deductible?

• Tax Deferred - Taxes are postponed until the investment is sold or withdrawn.
• Tax Exempt- Taxes may not be due on investment contributions or earnings.
• Tax Deductible- Investment contributions are deducted from your income before taxes are calculated.

What is a Roth IRA?

A new type of IRA, established in the Taxpayer Relief Act of 1997, which allows taxpayers, subject to certain income limits, to save for retirement while allowing the savings to grow tax-free.

To find out more detailed information, please see the Money 2000 Bulletin Tax-Advantaged Investing.

• Worksheet 1: How Much $$$ Can YOU Save by Making Tax-deductible Contributions?
• Worksheet 2a: IRAs at a Gance
• Worksheet 2b: A Traditional Roth IRA: Which is Best for You?
• Worksheet 3: "529" College Savings Plans Comparison Sheet
• Worksheet 4: How's Your Tax-Advantaged Terminology?

 

What is a 529 Plan?

A state-sponsored program designed to help parents finance education expenses

Michigan Education Savings Program - Offered through the Michigan Department of Treasury, Michigan Education Savings Program provides families a smart, flexible way to save for their children's future.

Michigan Education Trust - The Michigan Education Trust (MET) program allows parents, grandparents and others to pre-purchase undergraduate tuition.

Resources
To learn more about investing, check out some of these resources…

Investing on a Shoestring (Book) – by Barbara O’Neill, Ph.D, CFP

National Association of Investors Corporation - The National Association of Investors Corporation (NAIC) teaches individuals how to become successful strategic long-term investors.

For information regarding curriculum to teach investing topic, please click on the Curriculum listing to the left.