USING YOUR SAVINGS IN A WAY THAT EARNS

RETURN

- WHEN YOU DEPOSIT YOUR SAVING IN A

BANK ACCOUNT THAT PAYS INTEREST, YOU
ARE INVESTING.
 INVESTMENT IS AN ASSET OR ITEM THAT IS
PURCHASED WITH THE HOPE THAT WILL
GENERATE INCOME OR WILL APPRECIATE IN
THE FUTURE.
 when corporations are formed they
sometimes raise funds by selling shares
ownership, or stock to the public.

 investors purchase shares of corporate

stocks because they hope to earn a return.

 -stockholders may earn a return from their

stock in two ways. they may receive a share
of the corporations earning as a divided
payment or they may earn a capital gain if
they sell their stock for more than they paid
for it.
 CORPORATE STOCK-SHARE OF OWNERSHIP IN
A CORPORATION

 DIVERSIFICATION- INVESTING IN A WIDE

VARIETY OF FIRMS
 MUTUAL FUND- A FINANCIAL ORGANIZATION
THAT ACCEPTS FUNDS FROM MANY PEOPLE
AND INVESTS THEM IN VARIETY OF STOCKS.
 CORPORATE BOND- LOAN THAT ENTITLES AN
INVESTORS TO BE REPAID AT THE SPECIFIED
DATE AND RECEIVE INTEREST UNTIL THAT
DATE.
 FINANCIAL PLANNER- EXPERT WHO GIVES
INVESTMENT ADVICE FOR A FEE.
 THE PRICE OF THE CORPORATE STOCK CHANGES
FOR THE SAME REASON AS THE PRICE OF ANY
OTHER GOOD OR SERVICE.
 IT IS ALL A MATTER OF DEMAND AND SUPPLY. IF
THE CORPORATION IS SUCCESSFUL, MANY
PEOPLE WANTS TO BUY ITS SHARES WHILE MANY
CURRENT OWNERS WANTS TO SELL THA SHARES
THEY OWN.
 -ANYTHING THAT CAUSES PEOPLE TO WANT TO
OWN EITHER MORE OR FEWER SHARES OF STOCK
IN A PARTICULR CORPORATION WILL CAUSE THE
VALUE OF THAT FIRMS SHARE TO CHANGE.
 COMMON STOCK- GIVE THEIR OWNERS ONE
VOTE PER SHARE WHEN IMPORTANT DECISIONS
ARE MADE FOR THE FIRM. THE DECISIONS
INCLUDE IN ELECTING A BOARD OF DIRECTORS
TO OVERSEE THE FIRM OPERATIONS.

 SHARES OF PREFERRED STOCK-DO NOT GIVE THE

OWNERS A VOTE IN HOW THE CORPORATION IS
OPERATED. THEY DO PROVIDE A FIXED DIVIDEND
THAT IS EQUAL PERCENTAGE OF THE ORIGINAL
SALES PRICE OF THE STOCK.
 BENEFITS RECEIVED TAX PRICIPLE- THOSE
WHO RECEIVE MORE BENEFITS FROM THE
GOVERNMENT PROGRAM FUNDED BY A TAX
SHOULD PAY MORE OF THAT TAX.

 ABILITY TO PAY TAX PRINCIPLE- THOSE WITH

GREATER ABILITY TO PAY, SUCH AS THOSE
WITH A HIGHR INCOME, SHOULD PAY MORE
OF A TAX.
 TAX INCIDENCE- INDICATES WHO ACTUALLY BEARS THE BURDEN OF
A TAX.

 PROPOTIONAL TAXATION- THE TAX AS A PERCENTAGE OF INCOME

REMAINS CONSTANT AS INCOME INCREASES; ALSO CALLED A FLAT
TAX

 PROGRESSIVE TAXATION- THE TAX AS A PERCENTAGE OF INCOME

INCREASES AS INCOME INCREASES.

 REGRESSIVE TAXATION- THE TAX AS APERCENTAGE OF INCOME

DECREASES AS INCOME INCREASES.

 MARGINAL TAX RATE- THE PERCENTAGE OF EACH ADDITIONAL

PESO OF INCOME THAT GOES TAXES.
 THE PERSONAL INCOME TAX RATE IS A TAX
COLLECTED FROM FILIPINOS AND IS IMPOSED
ON DIFFERENT SOURCES OF INCOME LIKE
LABOR, PENSIONS, INTEREST AND DIVIDENDS.