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About Oregon daily emerald. (Eugene, Or.) 1920-2012 | View Entire Issue (Oct. 20, 2000)
You gotta know the basics before yon make a killing. By Brendan Picha OK, you were embarrassed when the gang in psych class was talking about the Hang Seng, and you thought they meant the new Chinese restaurant in town. Well, here’s your chance for a quick intro to basic money matters: Steamturmels guide to investment basics. Basics: Investors fund a com pany’s operations by buy ing a company’s stock. The purchaser becomes part owner of the compa ny, and the investor’s stock is linked to how well the company per forms. A good year will award dividends— cash from company profit to the investor. Not everyone profits, however—investors lose money if the company takes a dive. Stock: If the company makes a profit, there are several things it might do with the money: it could hold onto the cash and build up its infrastructure, called a growth stock. If it decides to pay out most of its profits in the form of dividends, it’s called an income stock. An investor that wants to buy a certain stock may go through a brokerage firm like Paine Webber, Charles Schwab or Merrill Lynch. In this situation, the firm charges the investor a fee and gives a percentage of that fee to the broker. CDs: A certificate of deposit is a safe alter native to investing in the stock market. You lend the bank money for a set period of time, from three months to five years. At the end of the term, you get your money back seven percent, based on the CD duration. Bonds: When you buy bonds, you lend money to the government or a corporation. A bond provides a fixed interest rate, called a Coupon Payment, and a return of the original investment at the date of maturity. The coupon is paid every six months. The original bond price and final interest pay ment are paid at the date of maturity. Bonds plus the earned interest, at a rate set at the time of purchase. This investment option is low-risk but also low return—typically between five and are low risk and a good way to diversi fy your portfolio. Mutual Funds: Mutual funds are a grouping of stocks or bonds that are managed by professional investors. An investment company buys quantities of securities and sells portions to the public. Funds vary depending on how many stocks are involved. Benefits: Your investment is spread out over numerous stocks, so if one tumbles, the fund won’t suffer. Annuities: Insurance companies sell annu ities as insurance policy/retirement account combos. You place money into an annuity and it’s allowed to grow, tax deferred, until you're 59. After you reach 59, you are allowed to remove money by either receiving steady payments over a period of time, or at once in a lump sum. There’s no limit to the amount of money you can put in, unlike an IRA or 401 K. However, taxes and broker charges are sig nificantly higher than other investments. Financial Self-Evaluation: Before invest ing, set aside enough money to live for at least six months. Also, pay off debt on credit cards and loans. However, some graduates have debt with such a low inter est rate that it’s actually more financially sound to pay back the loan over more years and invest the money. Many invest ments have a high enough return to cover the interest on your student loans and still make money. Decide how you feel about risk and return. As a rule, lower-risk investments like CDs won’t earn as much, but you’re sure not to lose money. Investing in the stock market has the potential to make a lot of money—but you could also lose it all. Most people deal with this by diversifying their investment portfolios. Now is definitely the time: beginning to invest at a young age is the key to com pounding interest and making your money work for you. • For more about investing and tips from the Motley Fool, go to Steamtunnels.net and search for keyword “invest.” Average Professors Salaries by Discipline Business Chemistry Economics Education Engineering English Fine Arts History Law Math Philosophy Physics Political Science Psychology Sociology Theater Arts Source: chronicle.com Private Public 65,054 66,464 55,556 58,977 67,255 66,682 49,137 54,369 76,060 78,024 50,931 51,960 48,619 51,249 54,363 54,937 102,513 95,829 54,087 57,871 54,856 55,105 63,516 63,537 57,645 56,027 53,188 58,157 53,242 54,471 48,134 49,219 Gadgets Guide High-Tech Toys: Better Living through Technology Olympus DS-150 Digital Voice Recorder: $299 Recording lectures may seem like just a use less hassle, but not with the Olympus DS-150 Digital Voice Recorder (olympusamerica.com). The Digital Voice Recorder uses speech to-text technology and holds up to 160 minutes of recording time. You may never have to take notes again (but we doubt it). Compressor Music Jukebox MP3 Player: $749 Most MP3 players can hold about two dozen songs max, but the Compressor Music Jukebox (musiccompressor.com) isn’t your ordinary portable MP3 player. The jukebox stores up to 100 CDs worth of music with its 6.4GB notebook hard disk drive. -Kathryn Yu s 1 S 1 s s 0 R PERSONAL JUKEBOX
