Download - Wk1 L1 Investment Forms
What are the various forms
of investment?
Lesson 1 Week 1
Accounting
YEAR 10
Dec 2014
AusVELS
• Explain the role and significance of savings and investment for individuals and for the economy, and demonstrate the skills required to successfully plan and manage personal finances.
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GKR
Study Handout 1. What do you think today’s lesson is about?
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Today’s Learning Intention:
To develop an awareness of various investment types.
Success Criteria:
Able to identify the investment forms
Able to provide one example of an investment for each investment form
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Key Vocabulary:
• Investment
• Profit
• Convert
• Equivalent
• Money Market
• Real estate
• Stocks
• Shares
• Bonds
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Activity – Handout 2
• Create your own definitions
– Look at each of the sentences in Handout 2. Study how each word (in bold) from the vocabulary list is used.
– Now create your own definitions for each of these words.
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3 Forms of Investment
1. Ownership
– Putting money into something that gives you ownership or part ownership of that ‘thing’.
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3 Forms of Investment
2. Lending
– You act like a bank
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3 Forms of Investment3. Cash equivalents
– As good as cash because they can be easily turned converted into cash
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Activity – Handout 3
• Complete handout 3 by:
– watching the rest of this presentation to understand each of the investment types named
– then identifying the form each of the investment types are by recording them in the correct column on the handout
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Types of Investment
Note the following is in no way to beconsidered investment advice. It is foreducational purposes only!
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Types of Investments
• Remember, we invest to make money
• How can we compare investments?
• We can look at Return on Investment – that is, how much we make based on how much we have put in
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Types of Investments
• Savings accounts allow you to keep your money in a safe place, a bank.
• By putting your money into a savings account you are lending the bank your money.
• You earn interest on themoney you put into yoursavings account.
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Click on the image to find out - How Banks Work!
Types of Investments
• Go to http://www.anz.com.au/personal/bank-accounts/calculators-tools/
• Use the savings calculator to work out how much interest you can earn in 1 year on $100,000
• Calculate the rate of return as:
ROI = (Gains – Cost)/Cost
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Types of Investments
• Business ownership
• Benefits – being own boss,possibly making more moneythan could as employee
• Risk – bankruptcy, very longhours, etc.
Click on image
If it costs $100,000 to invest in the business and ROI is 25% how much will you have earned on your investment?Dec 2014 Wk1-L1 15
Types of Investment
• Real Estate – owning real estate has many benefits but there are risks too such as:– tenancy risks (can’t get any / property damage)
– liquidity (can’t get money quickly)
– unable to make repayments on property
35 Reasons To Invest In Real Estate
http://www.yourinvestmentpropertymag.com.au/buying-property/35-reasons-to-invest-in-real-
estat
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Types of Investment
• Precious objects ownership – such as gold, art, classic cars, glass, jewellery, etc., etc.
• Benefits include the pleasure of ownership and an capital growth.
• There are risks such as capital loss,damage and theft.
• Usually takes a long time for capital growth to occur and generally does not generate any income until sold.
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Types of Investments
• A Money Market Fund is an investment that is easily converted to cash
• The security the fund invests in must be < 3 months to maturity so there is little risk of change in its value if interest rates change
• It is a place to store cash that pays a higher rate of interest than a savings account but is still relatively stable (safe)
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Types of Investments
Click on image
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A bond owner has lent money
Bonds – are fixed income investment
Types of Investments
• An investment is something into which we put our money with the intention of making a profit.
• Are modern cars, education and big screen TVs something we will make a profit from?
Complete the table.
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Handout 3 - Solution
Ownership LendingCash
Equivalent
Not an
Investment
StocksSavings
Account
Money Market Funds
Education
Business Bonds -Big Screen
TVs
Real Estate - - Cars
Precious Objects
- - -
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Review:
1. List the 3 investment forms.
2. Give one example of an investment option for each investment form.
3. List 1 learning strategy you used in today’s lesson.
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