Join Jane Barratt for an in-depth discussion in this video Compound interest, part of Learning to Manage Personal Investments.
- My husband's grandmother worked in a hospital…laundry in Canada for 30 years.…She was a woman of modest means,…but somehow she was able to buy a house…and retire comfortably.…The key to her retirement?…She invested in Canada savings bonds,…piling her savings into them in 1982…when they paid 12% interest.…In less than 10 years, she almost doubled her savings.…It was an amazingly savvy decision…and a great lesson in the power of interest.…It's been a long time since interest rates were 12%,…but it's still critical to understand…the concepts of interest and compound interest.…
So let's start with the definition.…Interest is what someone will pay you…to borrow your money.…When you put money in the bank for example,…you're essentially loaning the bank your money,…so that they can lend it to someone else.…Bonds work the same way.…When you buy a bond, it works as a loan to the government…or company that issued the bond.…It both cases, the bank, government, or company…pays you interest for the right to borrow your money.…
Jane is the founder of GoldBean, an online investing platform that helps first-time and experienced investors alike take their investments into their own hands. In this course, she shares her investment strategies with you. She breaks down the market into its five basic building blocks—cash and equivalents, stocks, bonds, funds, and insurance products—and the different vehicles where you can invest these building blocks. She also covers topics such as the importance of a balanced portfolio, understanding and managing your risk, identifying value in the market, and building your "money muscles" over time. Plus, learn how to calculate the rate of return of a portfolio vs. general market performance. Last, Jane outlines the options for DIY investing, when it makes sense to work with an advisor, and how to avoid costly investment fees.
- Why should you invest?
- Understanding compound interest
- Comparing stocks, bonds, and funds
- Managing risk
- Building a portfolio
- Finding where to invest money
- Working with a financial advisor