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strand 1 flashcards
Strand 1 flashcards (43)
| Term | Definition |
|---|---|
| Values | the knowledge of how to make smart decisions with money. |
| Needs | of necessity. |
| Wants | have a desire to possess or do |
| Scarcity | the state of being scarce or in short supply; shortage. |
| Goals | the object of a person's ambition or effort; an aim or desired result. |
| Over Confidence | excessively or unreasonably confident. |
| 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 Avoidance | the tendency for people to make emotional, rather than logical decisions in order to avoid feeling regret. |
| Confirmation Bias | our tendency to cherry-pick information that confirms our existing beliefs or ideas |
| Regret Aversion | occurs when a decision is made to avoid regretting an alternative decision in the future. |
| Endowment Effect | describes how people tend to value items that they own more highly than they would if they did not belong to them |
| Loss Aversion | a cognitive bias that describes why, for individuals, the pain of losing is psychologically twice as powerful as the pleasure of gaining. |
| Sunk Costs | an investment already incurred that can't be recovered |
| Hedonic Adaptation | refers to the notion that after positive (or negative) events (i.e., something good or bad happening to someone |
| Bandwagon Effect | people do something primarily because other people are doing it, regardless of their own beliefs, which they may ignore or override. |
| 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. |
| Entrepeneurship | the activity of setting up a business or businesses, taking on financial risks in the hope of profit. |
| Land | the part of the earth's surface that is not covered by water, as opposed to the sea or the air. |
| Labor | work, especially hard physical work. |
| Capital | wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing. |
| 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 system that relies on customs, history, and time-honored believes. |
| Mixed Economy | an economic system combining private and public enterprise. |
| Capitalism | an economic and political system in which a country's trade and industry are controlled by private owners for profit. |
| 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 | a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs |
| Ultimate Dream Goal | most extreme or important because either the original or final, or the best |
| Mission | To create awareness and educate consumers on access to financial services |
| Vision | the ability to think about or plan the future with imagination or wisdom. |
| Short Term Goals | something you want to do in the near future |
| Midterm Goals | objectives that may take longer to achieve than short-term objectives, but they often have a shorter timeline than that of a long-term goal. |
| Long Term Goals | any goals you create that you will not (or cannot) accomplish until some time in the future. |
| SMART Goals | specific, measurable, achievable, relevant, and time-bound |
| Financial Planning Pyramid | a portfolio strategy that allocates assets according to the relative risk levels of those investments. |
| Cash Flow | the total amount of money being transferred into and out of a business, especially as affecting liquidity. |
| Risk Profiling | the nature and level of the threats faced by an organisation. |
| Emergency Fund | a cash reserve that's specifically set aside for unplanned expenses or financial emergencies |
| Estate | an extensive area of land in the country, usually with a large house, owned by one person, family, or organization. |
| Portfolio | a range of investments held by a person or organization. |
| Insurance | a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. |
| 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 |
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podustay000
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