Human Capital Capital Assets

Cash Flow

Spend it Donate it Hold it Invest it

LEND OWN

You work for money Your money works for you

Two Types of Capital

Four Choices for Cash Flow

Two Basic Investment Choices

PASSIVE ACTIVE

Two Basic Positions

FINANCIAL RETURNS

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Lending◦ Those in which you lend your money to an organization which

typically pays you a fixed rate of interest

Ownership◦ Those that you own a piece of some asset or company and have

the ability to generate revenue and future profits

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Lending OwnershipYou need current income You don’t need current income

You don’t expect capital growth You expect capital growth

You are willing to accept a lower return for a higher degree of safety

You are willing to accept a higher degree of risk for the opportunity for a greater return

You cannot ignore significant ups and downs because you might need your capital back soon

You can ignore significant ups and downs because you do not need your capital back soon

Lending Ownership Lending Ownership

Savings Account

StocksOwner Financing (Lending on assets

you’ve sold)Business

Money Market Accounts

Mutual Funds

Private Lending (Lending on assets you

didn’t sell)

Real Estate

Money Market Mutual Funds

Minority Shares of Privately Held Companies

Precious Metals

CDs Collectibles

Government Securities

Bonds

Annuities

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FINANCIAL FOUNDATION Financial Growth Financial Protection (Insurance)

1. Goals 2. Budget 1. Health 2. Life

3. Records 4. Net Worth 3. Disability 4. Property/Liability

Sources: National Institute of Consumer Education – Eastern Michigan University/AIG

Mor

e Risk

Mor

e Retu

rn

Mor

e Risk

Mor

e Retu

rn

Less Risk

Less Return

Less Risk

Less Return

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Insured Checking and Savings Accounts

Treasury Securities

Certificates of Deposits

Money Market Mutual Funds

Money Market Accounts

High Grade Municipal Bonds

High Grade Corporate Bonds

Fixed Annuities

Balanced Mutual Funds

High Grade Preferred Stock

High Grade Convertible Securities

Blue Chip Common Stocks

Growth Mutual Funds

Owning Your Own Business

RE Investment Properties

Puts And Calls

Speculative Common Stocks

Junk Bonds

Precious Metals

Mor

e Risk

Mor

e Retu

rn

Mor

e Risk

Mor

e Retu

rn

Less Risk

Less Return

Less Risk

Less Return

Note: Any uninsured investment vehicle is a riskSource: Adapted from Investment Pyramid – Essex Corporation

Collectibles

Futures

1. Does my investment appreciate in value?2. Will it generate income through interest or dividends?3. Is it likely to outperform inflation? 4. What are some risks I might encounter?5. Are there any tax advantages?6. What fees and charges are involved?7. Can I borrow against it?8. Can I sell it quickly?9. What are some economic factors that should affect my

decision to buy, hold or sell?10. Should I consider diversification?

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All information and investment strategies presented herein are intended and should be used for educational purposes only.  Nothing herein should be construed as investment advice.  You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.  All investments involve some degree of risk. All information provided herein is believed to be reliable, but may be subject to errors and omissions. 

Keller Williams Realty, Inc. ("KWRI") does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind.  KWRI will not be liable for any loss or damage caused by your reliance on information contained in this presentation.  You are solely responsible for your own investment decisions.

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