Most of us want to make our money grow - for financial independence, retirement, educational needs, a new house, vacations. There are two main ways to begin: boost your income or cut your expenses.
Choose a method and, voila, you have more money.
Well, it may not be that easy, but, eventually, with more on the supply side (by moonlighting or getting a raise) and less on the expenditure side (by practicing thriftiness and budgeting), your income will grow.
At that point, you will need to know how to protect that money and how to put your money to work earning more money.
You can open a savings account. But then you are just barely compensating for the damage done by inflation. Or you can go into a money market deposit account, a money market mutual fund, common stock mutual funds, common stocks themselves, bonds, certificates of deposit, tax shelters, limited partnerships, commodities, precious metals, rare art, Oriental carpets, real estate. It is necessary to know the benefits and drawbacks, nomenclatures and techniques, of many of these savings and investment options in order to decide whether they are right for you - and how to approach them if they are.
To help you understand investments, the Monitor's Personal Finance pullout this month introduces a primer for investors. It will tell you what different investment terms mean and how to use them.
Our first topic: the stock market listings in your newspaper.
In many high school economics or history classes, teachers have their students track a handful of stocks found on the financial pages, investing imaginary sums in them. This is not bad as an academic exercise. But until you actually plunk down some money on a stock, the tables will hold only academic interest for you.
But if your own money is at stake, the gray agate type of the stock market pages will suddenly become alive with the drama of rising fortunes, quick losses , and amazing turnarounds.
(The Monitor does not carry these tables because of the amount of space they consume and because our deadlines occur before the markets close. For investors, the Monitor's aim is to keep you abreast of trends in the markets; a local paper can give you specific prices and will also carry stocks of local interest.)
Most stock listings look like the example in the box to the right. Here is what each category means: 52-week High/ Low
These numbers list the highest and lowest points the stock has reached during the past year. This information can be useful in determining how volatile a stock is and thus how risky. Also, by comparing the high and low prices with the stock's most recent closing price you can get a quick feel for the direction in which the stock is headed. A footnote usually will tell you whether the stock just hit a new 52-week high or low. If the letter ''s'' appears in the table, the range has been adjusted for a stock split or dividend of 25 percent or more within the past year. Stock
Here you'll find an abbreviation of the stock's name. Usually you can figure out that IBM means what it says, but it may take some research (a call to a broker) to decipher UslfeFd. But then, you usually use the stock listings to follow companies you know a bit about already. A ''pf'' afterward means preferred stock. Check other footnotes also. (UslfeFd, by the way, is US Life Income Fund, a closed-end investment fund listed on the NYSE.) Div.
This refers to the annual dividend. It is an estimate, usually based on the past year, so it may be misleading if the company is in a boom or bust phase. It is most helpful if the company is known for offering steady, predictable dividends. Footnotes will signal you on many different aspects - everything from foreign currency payments to liquidating dividends. Percent yield
Calculated by dividing the annual dividend paid on a share of stock by its current price per share. Since the dividend is inexact, the percentage yield may be inexact. A stock that costs $100 and pays a $5 a year dividend yields 5 percent. Because it is expressed as a percentage, it is easy to compare yields of stocks and of fixed-income investments such as savings accounts and money funds. But remember that a stock can appreciate (or depreciate) in price and thus can return more (or less) on your investment than can an interest-bearing investment. PE
The current market price of a share of stock divided by the annual earnings per share. A stock selling for $100 and earning $8 a share has a PE ratio of 12. 5 to 1, or simply 12.5. This is a very important and widely used gauge of how other investors see a stock. If the PE ratio is high, it indicates that investors expect the earnings to climb and have speculated up the stock price. If low, a stock may be undervalued. And if the PE changes rapidly, the stock is volatile. Sales
The number of shares of a stock that traded hands during the past session. If you know the number of shares outstanding, or you have a feel for the number of shares that trade on most normal days, then you can judge the activity of the stock with this figure. Heavy volume often results from surprise news announcements, dividends above or below estimates, new products, or discontinuation of old products. High/ Low/ Last/ Change
These numbers give you the range that the stock traded in during the past session, the closing price of the stock, and the amount of change up or down from the previous day's close. A ''u'' next to the high indicates the figure is the high for the year; a ''d'' is the year's low. Two periods (..) mean no change. When a stock issues a dividend, it falls in price by the amount of the dividend. If there is no other change than that, the stock is reported as (..).