Investments Ch 1

Answer 1

INTRODUCTION TO INVESTMENTS
Purpose of investing:
* Create wealth (generate income, capital gains, while preserving
current wealth)
* All individuals invest
* Real Assets (cars, homes, computer equipment)
* Financial Assets (stocks and bonds)
* Investing requires sacrifice of money and time

Answer 2

HOW TO SAVE MORE
* Credit cards * Pay yourself first
* Spend less than you make * Automate savings
* Bad money habits * Save your raise
* The 4-week rule * Pack your lunch
* Fund your 401(k)

Answer 3

YEARS TO BECOME A MILLIONAIRE

Answer 4

GOALS OF INVESTING

Answer 5

TYPES OF INVESTORS

Answer 6

HOW INVESTORS BUILD PORTFOLIOS

Answer 7

HABITS OF SUCCESSFUL INVESTORS
* Invest long-term * Understand emotional biases
* Save early and be consistent * Understand volatility
* Diversify * Distinguish between good
companies and good investments
* Don’t time the market
* Understand value is driven by cash
* Appreciate the impact of fees and flow
costs
* Take advantage of 401(k) plans