Who Wants to be a
Millionaire? Presented by: Chattanooga Area Chamber of Commerce Workforce Development Committee
True or False? More millionaires drive Toyotas than BMW’s.
Can you make to the big league? 3% of high school basketball players make it to a college team 3% college players make it to an NBA team. Less than 1% of high school players make it to NBA
WhenTrue you have education, you oranFalse? can earn more during your life.
Dropouts can live paycheck to paycheck but‌
High School Graduates can earn $1.2 MILLION DOLLARS during their lifetime.
They invest more time and money into their education.
The Dream…
Goal: Buy a $10,000 car Loan interest rate: 7% Length of loan: 5 years
• Compare Person #1 to Person #3 • Subtract total amounts of the two
• How much did Person #1 save?
A‐ B‐ C‐ 12
Keep Track of Your Money! • Avoid fees! • ATM: $2.50 weekly = $260 a year • Non-sufficient funds (NSF): • overdraw once a month = $840 a year
• Debit card overdraft protection
Debit Card Buyer Beware! Pre‐Authorization Holds Pending Transactions Consider using another form of Automatic Gratuity payment or by using your PIN Other Fees
but when or If your expenses exceed youR INCOME:
Reduce Your Spending!!!! Increase Your Income
CELL PHONE USAGE
$50/month x 12 months = $600.00 a year $80/month x 12 months = $960.00 a year
Downloading five apps at $2 a piece each month adds up to $120 a year.
$7 a meal X 3 meals a week=
$1,092 a year
If you smoke a pack a day (20 cigarettes or 1 every 3 hours): Day- $5 Week- $35 Month- $140 1 Year- $1,825.00 (That is enough to buy a used car!!!)
Guess the total amount spent on these 8 habits in a year?
College loans Banks & Credit Unions Retail Stores Finance Companies Friends & Family Credit Cards PayDay Loan Rent to Own
• College debt is higher than credit card debt in the USA. • College debt will surpass 1 trillion in 2012 • “For‐Profit” Colleges have higher tuition
33% U.S. students have loans At UTC 49% of students have loans
Average U.S graduate debt is $22,900 At UTC : $29,000
25% Chatt State students couldn’t pay 3 yrs after leaving school
These companies compile your credit history.
Call 1-877-322-8228
or visit www.annualcreditreport.com (this is the only FREE site)
Check your credit score once a year to prevent identity theft!
With a good credit score it is easier to •Get A Job •Rent an Apartment •Buy a House or Car •Have lower interest rates
Credit Agencies start collecting information as soon as you start spending money when you turn 18!
Pay off your bills every month! Pay ON TIME every month!
MOSTLY A’s You’re a Spender!
MOSTLY B’s You’re a Saver!
• Savings – Short-term – Postpones spending – Safe
• Investments – Long-term – Buy hoping for future profits – Risky
Divide 72 by the amount of interest you earn.
• 72 years • 36 years • 18 years • 12 years and your savings double!
A Certificate of Deposit Account: You agree to keep your savings in the account for a specific amount of time, usually 6 months to 3 years, in exchange for higher interest earnings. (Such as the 6% interest example)
How long will it take to double your money with an interest rate of 8%?
IRA Accounts • Provide tax breaks for workers.
401(K) Accounts • Companies match to a percentage what you contribute to the account.
Buying Stock • You become part‐owner of the company and share in the profits if the company does well.
Savings Bonds • You loan money to a company or government & are paid back with interest.
When you invest in a mutual fund, you pool your money with other investors for a combination of stocks and bonds. That way, if some of the individual stocks and bonds do poorly, the better performing investments may keep a good average return.*
*Many people hire professional financial consultants for up‐to‐date investment advice
Suppose you save $2,000.00 and invest it at 8% •By Age 28, you have $4,000 •By Age 38, $10,000 •At Age 48, you have increased your savings to $22,000.00!
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” ― Albert Einstein
$500,000.00 (Half a Mil!) OR A penny a day, doubled every day for 1 month?
Day Amount 1 2 3 4 5 6 7 8 9 10
$.01 .02 .04 .08 .16 .32 .64 1.28 2.56 $5.12
Day 11 12 13 14 15 16 17 18 19 20
Amount $10.24 20.48 40.96 81.92 163.84 327.68 655.36 1,310.72 2,621.44 $5,242.88
Day 21 22 23 24 25 26 27 28 29 30
Amount $10,485.76 20,971.52 41,943.04 83,886.08 167,772.16 335,544.32 671,088.64 1,342,177.28 2,684,354.56 5,368,709.12
31
$10,737,418.24
1 - Make Savings a Habit
2 - Start Saving Early
3 - AVOID Credit