Video
- 53 minutes
Lesson Prep
- Note most members will not be ready to start investing
- Bring a calculator
Checklist
- Welcome to Lesson 7! In this lesson, we’ll take a deep dive into investing so you’re ready when the time comes for you to start investing.
- Review the Baby Steps
- Do a budget checkup
- Everyone should have a fun money line item in their budget each month. This is money to use however you want. How has this helped you stick to your budget?
- Instruct everyone to turn to page 105 in their Member Workbook
- Take attendance and watch the video
- Look for your coordinator cue before the One-Minute Takeaway to get ready for the Activity
Notes
- When you follow the baby steps and invest 15% of your income over time, you will become a baby steps millionaire!
- Lower your risk by diversifying your investments across four types of mutual funds
- Keep it simple and never invest in things you do not understand
Tax Plans
- Tax deferred plans
- 401(k)
- IRA
- 403(b)
- 457
- After tax plans that grow tax free
- Roth 401(k)
- Roth IRA
- Roth 403(b)
- Roth 457
- Diversify across 4 types of mutual funds
- Growth and income
- Growth
- International
- Aggressive growth
How to Invest 15% of your income?
- If your company offers a Roth 401(k) with a match and good mutual fund options:
- Invest the entire 15% in that plan.
- If your company offers a traditional 401(k) with a match:
- Invest an amount equal to the match.
- Next, invest up to the limit in a Roth IRA.
- If you have a higher income and hit the Roth IRA limit before you’ve invested 15% of your income, go back to the 401(k) and finish your investing there.
Activities
- Everyone turn to page 111 and take a few minutes to work through the Activity. Married couples, work on this together. I’ll be walking around the room if you need help.
Discussion Questions
-
Are you on track or off track to reach your retirement goals? How has this lesson helped you feel more confident in your future?
-
Which tax-advantaged plans are available to you today? What’s the fi rst step you’re going to take to figure out where and how you need to invest?
-
Building wealth is the key to creating a legacy that will outlive you. What comes to mind when you think about the kind of legacy you want to leave?
-
After watching this lesson, do you believe that investing in mutual funds over a long period of time is the best way to build wealth?
Wrap Up
- Go to page 113 and read through the action steps
- Keep working on your budget
- You need to be aware of how much you have spent on certain categories
- You need to make a monthly budget
- You need to be having Budget Committee Meetings