Banking
What percentage of your income should you save?
20%
What does FOMO stand for?
Fear of missing out
What does APR stand for?
Annual percentage rate
What is a premium?
amount you pay for insurance
What is a stock?
A share of ownership in a company.
What is compound interest?
Interest on interest
What is a budget?
a way to balance income, expenses and financial goals for a specific length of time
a spending plan based on income and expenses
What is credit?
ability to buy things and pay later
What is a deductable
amount you pay before insurance benefits pay
What is a bond?
Loan to a government or company
What is it called when you have negative bank balance ?
Overdraft
What is confirmation bias?
Believe what is consistent with existing beliefs
Ignoring contradictory information
What is your net worth?
Net worth = Assets minus Liabilities (may be negative)
What are the 3 kinds of insuranc?
Auto
Health
Renters
What is diversifying
Buying different investments to lower risks
What are the 3 functions of $?
Medium of exchange, unit of account, store of value
What is zero-based budget?
every dollar of income assigned to specific expense
leaves balance of $0
anticipate all expenses
allot income to each expense
What is the difference between assets and liabilitie?
Assets - things we OWN
Liabilities - things we OWE
what is limit?
max insurance will pay for a type of coverage
Is passive or active investing less risky?
Passive is less risky
What 2 questions should you ask when opening a bank account?
What are the mÃnimums? What are the fees?
What is the endowment effect?
Assigning more value to things we already own
How can credit cards be dangerous?
You can have a ton of debt
What is an actuary?
professional who analyzes risk and calculates premium needed to cover potential loss payments
What is an IPO
initial public offering = selling new shares by a company