Lesson 3.6 Money Management and Financial Planning

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Imagine you have $10,000 to invest. You can either put it all into a single stock or diversify [spread] it across five different investments. What would you choose, and why?

Why might someone choose to keep money as cash at home despite the risk of theft or loss, and in what situations could this method actually be beneficial?

How might the convenience of a checking account lead to overspending, and what strategies can people use to stay financially responsible while using one?

If a savings account offers higher interest but limits access to funds, how should someone decide how much to keep in savings versus in a more accessible account like checking?

When is it a smart financial decision to put money into a CD, even though you can't access it easily for months or years?

How does the concept of risk and reward apply to investing in stocks and bonds, and why is diversification an important strategy for long-term financial success?

Given the differences between Traditional and Roth IRAs, do you think that it would be better for you to pay taxes on your retirement funds now or later when you retire? Why?

1) According to the author of this website, this is how you should look to allocate your funds. What would be a benefit and a challenge of dividing money in this way?

2) Consider your income right now or your future income. Create a wish list of what you'd like to have and describe how you would look to diversify how you manage your money.

Consider the definition of generational wealth. Why is generational wealth important, and what are some ways young people can begin building it even if they come from families without existing wealth?