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Strand 1 EQ
43 words
| Term | Definition |
|---|---|
| Values | Unrelated to how much money we actually have, these values reflect what we think or believe about money |
| Needs | Expenses that are essential for you to be able to live and function |
| Wants | Expenses that help you live comfortably |
| Scarcity | The demand for a good or service is greater than the availability of the good or service |
| Goals | What you would like to accomplish Financially |
| Overconfidence | the quality of being too confident; excessive confidence |
| Fear of Missing Out | anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media |
| Regret Avoidence | the tendency for people to make emotional, rather than logical decisions in order to avoid feeling regret |
| Confirmation Bias | the tendency to interpret new evidence as confirmation of one's existing beliefs or theories |
| Regret Aversion | when a decision is made to avoid regretting an alternative decision in the future |
| Endowment Effect | an emotional bias that causes individuals to value an owned object higher, often irrationally, than its market value |
| Loss Aversion | the observation that human beings experience losses asymmetrically more severely than equivalent gains |
| Sunk Costs | money that has already been spent and cannot be recovered |
| Hedonic Adaption | how people generally return to the same level of happiness despite their differences |
| Bandwagon Effect | people do something primarily because other people are doing it, regardless of their own beliefs |
| Economy | the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services |
| Resources | a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively |
| Entreprenuirship | the activity of setting up a business or businesses, taking on financial risks in the hope of profit. |
| Land | real estate that is exclusive of any buildings or other assets situated on the property |
| Labor | the contribution to productive activity made by the workforce both by hand and mentally |
| Capital | typically cash or liquid assets being held or obtained for expenditures |
| Market Economy | an economic system in which production and prices are determined by unrestricted competition between privately owned businesses. |
| Command Economy | an economy in which production, investment, prices, and incomes are determined centrally by a government. |
| Traditional Economy | A traditional economic system is based on customs, history and time-honored beliefs |
| Mixed Economy | an economic system combining private and public enterprise. |
| Captalism | an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. |
| Socialism | a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. |
| Communism | economic system where the free exchange of goods and services is controlled by individuals and groups, not the state |
| Ultimate Dream Goal | You will need money to turn some of your dreams into reality. These “financial dreams” form the basis and ultimate goals of your financial plan. |
| Mission | defines what line of business a company is in, and why it exists or what purpose it serves. |
| Vision | all about what you want to achieve financially; simple but motivational. |
| Short-Term Goals | the things you'll spend money on generally within a few months or years. |
| Mid-Term Goals | what ties your short-term and long-term goals together. |
| Long-Term Goals | usually your big-picture costs. These goals may take several years or even decades to reach |
| SMART goals | Specific, Measurable, Attainable, Relevant, and Timebound. |
| Financial Planning Pyramid | a road map to help people decide where to put their emphasis today in preparing to reach their ultimate financial goals |
| Cash Flow | the total amount of money being transferred into and out of a business, especially as affecting liquidity. |
| Risk Profiling | Profit risk is a risk management tool that focuses on understanding concentrations within the income statement and assessing the risk associated with |
| Emergency Fund | a financial safety net for future mishaps and/or unexpected expenses |
| Estate | the economic valuation of all the investments, assets, and interests of an individual |
| Portfolio | a collection of investments and holdings like stocks, bonds, mutual funds, commodities, crypto, cash, and cash equivalents. |
| Insurance | insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses |
| Tax Planning | the analysis of a financial situation or plan to ensure that all elements work together to allow you to pay the lowest taxes possible |
Created by:
horsllau000
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