1. INVESTMENT BASICS
Jim Froman, Financial Advisor

2. "What is the most important strategy for
investing money?"
A. Have a Plan
B. Time
C. Consistency
D. High Rate (or Rate of
Return)
E. Compounding
F. All of the Above
F. All of the
Above

3. Strategy 1. Have a Plan

4. Strategy 2. Time is on your side

5. Put time on your side
$4,000 a year, 10 percent return
AGE BILL TOM
25 to 34 0 40,000
35-44 40,000 0
Amount 40,000 40,000
invested
VALUE at 68,850 186,380
age 45

6. Start Saving NOW
Age Monthly Years to age
contribution 65 ($1million)
25 $157 40
30 $261 35
35 $439 30
40 $747 25
45 $1,306 20
50 $2,393 15
55 $4,841 10
60 $12,807 5
*Assumes 10% annual Rate of Return

7. Strategy 2. Time is on your side

8. Strategy 3. Consistency and
Compounding
76,301
Save $50
a Month
With a
29,775
5% Yield
7,764
3,400
614
1 year 5 year 10 year 25 year 40 year

9. Strategy 4. Rate of Return

10. The “Rule of 72”
• 72/Rate of Return = Years it takes to double
your investment.
– Example
72/6% = 12 years to double
72/12% = 6 years to double
A $2,000 investment, with a return of 12%, will equal
$4,000 in 6 years.
There can be no guarantee that any investment will double in any period of time. The
Rule of 72 is a mathematical concept and is not illustrative of any specific product
offered by UVEST. It is important to note that the Rule of 72 does not guarantee
investment results or function as a predictor of how your investment will perform. It is
simply an approximation of the impact a targeted rate of return would have.
Investments are subject to fluctuating returns and there can never be a guarantee that
any investment will double in value.

11. Strategy 5. Investment Options
• Stocks
• Bonds
• Mutual Funds

12. Stocks: Sharing a
Corporation
Stocks are pieces of the corporate pie. When you buy
stocks, or shares, you own a slice of the company.
Common Stock Preferred Stock
•Owners share in •Dividend payment
success when has priority over common
company profits. stock dividends.
•Owners at risk if •Dividends don’t increase
company fails. if company prospers.

13. Bonds: Financing the Future
Bonds are loans that investors make to corporations and
governments. The borrowers get the cash they need
while the lenders earn interest.
Investors Corporate Bonds
Willing to
Lend Money
U.S. Treasury Bonds
Investor gets Municipal Bonds
par value at
maturity Bond
Matures

14. Mutual Funds:
Putting It Together
A Mutual Fund is a collection of stocks, bonds, or other
securities owned by a group of investors and managed by
a professional investment company.
How Mutual Funds Work?
A large number of people with money to invest,
buy shares in a mutual fund.
Money Goes To The Their Pooled Money Has Fund Manager Invests the Money
Mutual Fund Company More Buying Power In a Collection of Stocks,
Bonds or Other Securities

16. Strategy 6. Understand Inflation

17. Strategy 6. Understand Inflation

18. Summary
• Time is on your side. The sooner you begin saving, the
quicker you can make your dreams come true. No
amount is too small to get started.
• Consistency is the key to building your savings.
What you save isn't as important as the need to regularly
sock something away. Always pay yourself first. A
good habit is to save at least 10 percent of everything
you earn.
• Don't put all your eggs in one basket. Think long term
for your future goals--college, a home, retirement--and
short term for other expenses. This way you won't be
tempted to dip into your retirement fund for things like
car repairs, clothes, or whatever else may come up.

19. It’s never too early to start!