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Stack #2091705
| Question | Answer |
|---|---|
| type of card issued by a bank to help users finance a purchase | credit card |
| a detailed report of an individuals credit history | credit report |
| a measure of an individuals credit risk calculated from a standard formula | credit score |
| preferred method of debt repayment; lists debts from smallest to largest | debt snowball |
| a decrease or loss in value | depreciation |
| interest rate charged to a customer during the early stages of a loan | introductory rate |
| an expense that can be deducted from one's tax income | tax deduction |
| a form of federal or state financial aid that does not need to be repaid; usually given to those who demonstrate financial need | grant |
| a form of financial aid that does not need to be repaid; usually awarded on the basis of academic or athletic accomnplishments | scholarship |
| a program that allows students to work part time while continuing their studies | work study |
| the practice of dividing the money a person invests between several different types of investments in order to lower risk | diversification |
| the process of setting money aside to increase wealth over time for long term financial goals such as retirement | investing |
| account or arrangement in which a person puts his money for long term growth; money should not be used for a suggested minimum of 5 years | investment |
| quality of an asset that permits it to be quickly converted into cash without loss of value; availability of money | liquidity |
| a list of your investments | portfolio |
| degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit | risk |
| relationship of substantial rewards compared to the amount of risk taken | risk-return ratio |
| piece of ownership in a company; mutual fund or other investment | share |
| securities that represent part ownership or equity in a corporation | stocks |
| money that is invested either tax deferred or tax free within a retirement plan | tax-favored dollars |
| any income that is generated by working | earned income |
| tax pain out by anyone who earns an income | income tax |
| money earned on a regular basis with little or no effort required to maintain it | passive income |
| the process by which we market ourselves to others; highlighting personal strengths interests and goals | personal branding |
| income generated by selling an investment at a higher price than what you paid for it | portfolio income |
| taxes paid by anyone who owns property such as land a home or commercial real estate | property taxes |
| a brief account of one's professional or work experience and qualification often submitted with an employment application | resume |
| tax on goods and services that go to your state or local government | sales tax |
| a federal insurance program funded by taxpayer dollars that provides benefits to people who are retired, un-employed, or disabled | social security |
| what is the most sensible way to buy a $4000 car? | use the sinking fund approach and save $400 a month for 10 months |
| what is the order of priorities for your money? | give-save-pay bills |
| what is not important when it comes to saving money? | income |
| what is not a reason to save? | pay off debt |
| what is the benefits of a money market account for your emergency fund over a savings account? | money market account is accessible and has check writing privileges if needed |
| how to not describe the baby steps | series of steps completed in any order that will lead to never having debt |
| who must you pay first when it comes to saving? | yourself |
| what is a true statement about a one-time investment for 40 years? | the annual rate does matter when making a one time investment |
| what are the pros of paying with cash? | you can almost always negotiate a better deal |
| what is the relationship between risk and return? | when the risk goes up, so does the potential return |
| what is the relationship between liquidity and return potential? | the more liquid an investment, the lower the return |
| what is true about investing in single stocks? | it has a high risk |
| what makes mutual funds the most appealing investment? | it has natural diversification |
| what is the KISS rule? | keep it simple stupid- do not buy anything you do not understand |
| what is the most aggressive mutual fund? | a young, new company |
| what is the est option to do if you begin losing money in your mutual fund? | leave it alone and continue to invest money into the fund |
| what should you never consider when investing? | current state of the economy |
| if your company does not provide any type of match for your 401(k), what is the best investment option? | invest the maximum amount into a roth ira and put the rest into a 401(k) account |
| what is the primary difference between a roth ira and a traditional ira? | roth ira grows tax free; traditional does not |
| under what conditions are you not able to make a tax-free withdrawal from your roth ira? | major career change or temporary drop in income |
| what is the best option for your retirement plan when you leave a company? | do a direct transfer into an ira |
| using the rule of 72, how long will it take for your money to double at 12%? | 6 years |
| what is the problem with using credit cards even if you pay it off each month? | you are likely to spend 12%-18% more with credit cards because you do not consider the consequences as you do with cash |
| what is false about debt consolidation? | you end up saving money because you get a lower investment rate |
| what is the key to building wealth? | staying debt free |
| describe a zero-based budget | income-outgo=zero |
| buying the beneficiary position on a life insurance policy on someone who is dying | viaticals |
| the least liquid of all consumer investments | real estate |
| great for emergency funds due to their liquidity and staility | money market |
| 70 year track record of 4.1% returns | gold |
| evidence shows that vast majority of investors lose money in this type of trading | day trading |
| 100 shares of walmart | single stock |
| a debt instrument where a return comes on the interest rate paid on the loan | bonds |
| portfolio manager that manages the pool | mutual funds |
| one benefit of this type of instrument is your ability to influence its value | real estate |
| represents a piece of ownership in a company | stock |
| structured and maintained to match the investment objectives stated in its prospectus | mutual fund |
| your return is the fluctuation in price and interest rate paid | bond |
| 6 months or 1 year savings account that pays little or more interest than a regular savings account | certificate of deposit |
| you should have lots if cash before investing in this | real estate |
| bad investment because they result in price distortions and are highly volatile | commodity |
| % paid to the lender for the use of borrowed moiney | interest rate |
| 5 steps to financial success | 5 foundations |
| saving money over time for a large ppurchase | sinking fund |
| a yearly fee that is charged by the credit card company for the use of their credit card | annual fee |
| cost of borrowing money on an annual basis; takes into account interest rate and other fees on a loan | annual percentage rate (apr) |
| a person or organization that uses a product or service | consumer |
| the granting of a loan and the creation of debt; any form of deferred payment | credit |
| an obligation of repayment by one party to another | debt |
| a system by which goods are produced and distributed | economy |
| the knowledge and skill set necessary to be an informed consumer and manage finances effictely | financial lieracy |
| a fee paid by the borrower to the lender for the use of borrowed money | interest |
| a debt evidenced by a note which specifies the principle amount interest rate and date of repayment | loan |
| all of the decisions and activities of an individual or family regarding their money through spending, saving, and bedgeting | personal finance |
| interest rate paid on interest previously earned ; credited daily, monthly, and annually | compound interest |
| $500 readily available to be used only in the event of an emergency | emergency fund |
Created by:
alyssaboiman