REPLY TO 3 COMMENTS BASED ON THE QUESTION BELOW:

Investigate at least five different savings and investment vehicles, including savings deposit accounts, mutual funds, IRAs, 401ks, 403bs, etc. Determine the costs, return on investment, risks, and appropriateness for you. Discuss in this forum what you learned and how you can use this knowledge to increase your personal wealth.

Your answer should focus on organizing your most relevant comments in a coherent fashion.

1) josh

Determine the costs, return on investment, risks, and appropriateness for you.

I found the following types of accounts at the bank I have a savings account with:

Regular Share Savings " $5 to open, $50 daily minimum balance to earn dividends, dividends compound daily and credited every quarter at 15%, limited to 6 checks or electronic transfers per month.It gives a limited amount of return and really there is little to no risk as I have access to this account via an ATM card, I tend to stay away from this account as much as possible in order to allow it to keep building as it is my emergency fund, since it is the only account I have at this bank I do not worry about the transfer or checks rule.

Money Market - $2500 to open, $50 daily minimum balance to earn dividends. Dividends compound daily and credited every quarter at 5% or 30% depending on the amount, see Table 1 below, limited to 6 checks or electronic transfers per month.It gives a higher amount of return and has the same risk, currently I do not have the adequate bank flow to start up this account but when I do, I am considering using this as an additional emergency fund account vehicle.

Table 1:

MONEY MARKET SAVINGS(S7)

SHARE RATES

RATE

APY*

Weekly Money Market Rate (S7)A $50 daily minimum balance is required to earn dividends. The APY stated is accurate as of the last day of the previous quarter. Dividends are compounded daily and will be credited to your account every quarter. If you close your account before dividends are paid you will not receive the accrued dividends.

Money Market balance between $.00 to 2,499.99

.05%

.05%

Money Market balance between $2,500.00 to 9,999.99

.30%

.30%

Money Market balance between $10,000.00 to 24,999.99

.30%

.30%

Money Market balance between $25,000.00 to 49,999.99

.30%

.30%

Money Market balance $50,000.00 and up

.30%

.30%

Coverdell Education Savings Account " This account has the same rules as the Shared Savings at the top with one additional rule being that earnings on contribution are tax-free as long as they are qualified education expenses.I am looking at this option in addition to education savings plans within my state for my daughters education, due to the low interest of 15% along with the estimated costs of college in the next fifteen plus years, it would be appropriate to start funding this now but I would like to find an education savings plan that has a slightly higher interest payment.

Traditional IRA " Open with a minimum $5 contribution.No maturity date, no minimum annual contribution.Maximum contribution limits $5,000 for under 50, $6,500 for over 50.Self employed members and qualified employers and employees can contribute to a Traditional IRA called a SEP IRA.A service fee will be charged if a withdrawal is made before the depositor reaches the age of 59. The fee is 2% of the amount withdrawn for each withdrawal this includes transfers to other financial institutions. No fee is charged if the withdrawal occurs within 10 days of the annual anniversary date of the opening of the account or the first 10 days of the following quarter, $50 daily minimum balance to earn dividends, dividends compound daily and credited every quarter at 75%.I am looking at eventually starting one of these after I pay off my debts.

Roth IRA " Same rules as traditional.I will most likely be starting both a traditional and Roth IRA with the same bank if allowed to do so.

Discuss in this forum what you learned and how you can use this knowledge to increase your personal wealth.

With the vehicles at this bank, I can easily expand my bank role just by ensuring that I put money away into the vehicles that I should put them in.Currently, I have just a savings account but in a few months or as early as next year, I can add more accounts and fund them all in order to have a better retirement without resorting to not having enough money for everything else.

2)

cameron

After researching the prescribed savings and investment options, I have determined that funding a 401K would be the best for my situation. I have used Certificate of Deposits in the past and am not opposed to them, I like how once the money is put into it, the money becomes "out of sight, out of mind." The part that makes that option unfeasible at this time is that they require an initial deposit, which is opposite of my debt removal plan.

401(K) is the best option for me because of a new retirement policy the government developed. They will match up to 5% of my base pay that I invest, which is an amount that would be easy to live without. After 9 years of contributions at that rate, there would be over $35,000 worth of investment capital in my account-not including interest earned during those 9 years. By the time I reached the eligible age to have my account pay out, there would be just over $900,000 available (allowing for 5% growth), tax free. Comparing that to the retirement pay scale in place now, I would gain a difference of over $400,000.

Comparing initial cost, return on investment, and risks involved, the 401(K) would be the best retirement vehicle for my situation.

3)

jermie

Long-term Financial Health

Savings deposit accounts are relatively cheap to own and may require a low or no minimum balance (Kapoor, Dlabay, Hughes, & Hart, 2017). These accounts typically grow with a very small amounts of interest offering a lower return. These accounts are however insured by the FDIC which makes them fairly risk averse. These are appropriate for me as they earn interest but also have ease of access and liquidity. A savings account is where I would store my emergency funds to earn interest, and separate them from spending money.

Money market accounts are savings accounts that have a minimum balance and earn money based on current market interest rates (Kapoor, Dlabay, Hughes, & Hart, 2017). Fees can be incurred if a minimum balance is not kept. These accounts have higher return on investments than savings accounts as interest rates can see the upside of the market. There is some liquidity available as these accounts can have checkbooks tied to them. Additionally, risk is somewhat mitigated as these accounts are insured by the FDIC. The higher interest rates make this stand out to me as a place to put away large sums of funds that have a planned date to be spent in the future, such as a down payment for a home.

An IRA is an individual retire account, where funds are put away tax free and are taxed upon withdrawal (Kapoor, Dlabay, Hughes, & Hart, 2017). This savings plan is for those who do not participate in an employer sponsored plan. This makes the cost somewhat low as contributors and can put in whatever they want. These retirement accounts grow largely due the compounding effects of interests and are a long-term investments. The risk with IRAs can vary based on the choice of places to invest in. By default, funds for younger people with more years for potential earnings will start in riskier (higher returning) funds, and get more conservative as they age. An IRA is not a good fit for me as I contribute to an employer sponsored 401(k) plan and would not be eligible.

401(k) is a tax deferred plan that employers sponsor for their employees. Although these have no cost to employees, typically employees must contribute a certain percentage in order to receive an employer portion into the vehicle. 401(k)s offer an employer to provide benefits to employees while lowering the amount they are taxed on.401(k)s are similar to IRAs in the flexibility of the risk/reward strategy that can be chosen by the individual. This is a preferred retirement account for me as it is readily available and comes with a matching contribution from my employer. The high annual limits of contribution also make this account attractive for retirement savings.

Roth IRAs, are similar to Traditional IRAs in the contributions limits, however the contributions are not tax deductible (Kapoor, Dlabay, Hughes, & Hart, 2017). The account matures from post-tax contirbutions, and withdrawals after retirement can be made tax free. The return on investment can be higher for these accounts than can traditional IRAs, as they do not count as income when being drawn off of. Risks are similar to the IRA and 401(k) risks where flexibility allows investors to choose their risk level. I would consider using a Roth after I have maxed out 401(k) contributions. I like the fact that the Roth can be accessed without income tax at withdrawal, as this tax is applied against the interest as well as the principle.

In studying the various accounts and vehicles that I could use to build my personal wealth, I feel that there is more activity needed on my behalf to generate this wealth. I should consider the long-term effects that proper savings and investments could have on my future. The effects of compounding interest dictate that at a certain point, only very large contributions can really match up against an investment that has collected interest over hundreds of periods. The time to save more effectively is now.