Success is an attitude
Small steps to accomplish
great things!
Presenter Name (Edit on Title Master)
Title (Edit on Title Master)
June XX, 2006 (Edit in View: Header and
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For educational and informational purposes only.
©2006 Lincoln National Corporation
LFD0606-0995 (UBP-0012-06) 06/06
Please read
This seminar is for Educational and Informational
purposes only. It is intended to be accurate and
authoritative in regard to the subject matter covered.
Lincoln Financial Distributors, Inc. presents this
seminar for informational purposes only. It is
presented with the understanding that we are not
engaged in rendering legal or tax advice.
While this seminar discusses general tax aspects and
investment concepts, we make no representation as to
suitability for individual clients. Interested parties
should seek their own tax and legal advice before
implementing a plan of the type described in this
presentation.
For educational and informational purposes only.
LFD0606-0995
“It is our attitude at the beginning of a difficult
task which, more than anything else, will
affect it’s successful outcome.”
William James
American philosopher
For educational and informational purposes only.
©2006 Lincoln National Corporation
LFD0606-0995 UBP-0012-06 06/06
What would you like to get out of today?
For educational and informational purposes only.
©2006 Lincoln National Corporation
LFD0606-0995 UBP-0012-06 06/06
Agenda items
Types of common investments
Risks of investing
Simple ways to minimize risk
For educational and informational purposes only.
LFD0606-0995
Agenda items
Types of common investments
Cash
Cash equivalents (CDs, Treasury bills)
Bonds
Stocks
Mutual funds
Retirement accounts
For educational and informational purposes only.
LFD0606-0995
Types of investments
Cash
• Checking account
• Savings account
For educational and informational purposes only.
LFD0606-0995
“The most powerful force in the
universe is compound interest.”
—Albert Einstein
For educational and informational purposes only.
Types of investments
Cash
• Simple interest vs. compound interest
Which would you rather choose?
Investment
$1,000
Time
20 years
Interest rate
7%
Simple interest account
$2,330.00 after 20 years
Compound interest account
$3,616.53 after 20 years
For illustrative purposes only and is not indicative of any
particular investment or performance.
For educational and informational purposes only.
LFD0606-0995
Types of investments
Cash equivalents
• Certificates of deposit
• Treasury bills
• Money market accounts
For educational and informational purposes only.
LFD0606-0995
Types of investments
Bonds
• Corporate bonds
• Municipal bonds
• Government bonds
For educational and informational purposes only.
LFD0606-0995
Types of investments
Stocks
For educational and informational purposes only.
LFD0606-0995
Types of investments
Mutual funds
For educational and informational purposes only.
LFD0606-0995
Types of investments
Retirement accounts
• Individual Retirement Account (IRA)
• 401(k)
• 403(b)
For educational and informational purposes only.
LFD0606-0995
Agenda items
Risks of investing
Investment risk
Market risk
Liquidity risk
Interest rate risk
Credit risk
Inflation risk
For educational and informational purposes only.
Risks of investing
Investment risk
For educational and informational purposes only.
LFD0606-0995
Risks of investing
Market risk
For educational and informational purposes only.
LFD0606-0995
Risks of investing
Liquidity risk
For educational and informational purposes only.
LFD0606-0995
Risks of investing
Interest rate risk
Bond
Prices
Interest
Rates
For educational and informational purposes only.
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Risks of investing
Credit risk
For educational and informational purposes only.
LFD0606-0995
Risks of investing
Inflation risk
• If over 30 years, the value of $1 decreases by 3% per
year*
Current average cost
$1.50
$3.00
$8.00
Projected cost
$3.00
$7.28
$19.42
*The average rate of inflation is 3% over the past 20 years. Inflation is represented by the Consumer Price Index.
For educational and informational purposes only.
LFD0606-0995
Agenda items
Simple ways to minimize risk
Diversification
Asset allocation
Rebalancing
*These concepts do not assure a profit or protect against an
investment loss.
For educational and informational purposes only.
LFD0606-0995
Simple ways to minimize risk
Diversification
*Diversification does not assure a profit or protect against an investment loss.
Cash
Stocks
Bonds
For educational and informational purposes only.
LFD0606-0995
Simple ways to minimize risk
Asset allocation
*Asset Allocation does not assure a profit or protect against an investment loss.
Younger investor
Older investor
10%
10% 10%
40%
40%
80%
50%
20%
40%
These examples
are for illustrative,
educational,purposes
and informational
purposes only.
For educational
and informational
only.
LFD0606-0995
Simple ways to minimize risk
Rebalancing
*Rebalancing does not assure a profit or protect against an investment loss
Stocks $1,000
Stocks $1,100
after one year
Bonds $1,000
Bonds $1,000
rebalanced
Stocks $1,050
Bonds $1,050
For educational and informational purposes only.
LFD0606-0995
Putting your knowledge to use
Jonah’s concerns:
• losing the money he had saved
• not having money for a “rainy day”
Jonah’s investments:
• savings account
- he used the savings account to accumulate his money
• Treasury bill
- he invested his money in a T-bill because they are low risk
• low risk mutual fund
- he used the mutual fund to help grow his money
For educational and informational purposes only.
LFD0606-0995
Only the beginning
It starts with you!
For educational and informational purposes only.
LFD0606-0995
Thank you
Questions?
Neither Lincoln nor its representatives provide legal or tax advice. You should contact
your tax advisor or attorney regarding your particular situation.
Securities and investment advisory services distributed by Lincoln Financial
Distributors, Inc., a broker/dealer and registered investment advisor. Insurance
products are issued by Lincoln affiliates. Lincoln Financial Group is the marketing
name for Lincoln National Corporation and its affiliates.
For educational and informational purposes only.
LFD0606-0995