Bonds
loan made to a government or company that will be paid back on a given schedule at a given interest rate
bond
A share of ownership in a corporation.
Stock
Individual retirement account in which money is taxed upon withdrawal.
Traditional IRA
One main types of mutual funds is ______
money market fund, bond fund, index fund
Rating of how likely you are to pay back a loan.
Credit Score
the reason high yield bonds pay higher interest rates
higher risk
Another word for short term investing.
speculation/day trading
A personal savings plan; contributions are not tax-deductible; earnings are tax-free
Roth IRA
Investment with a fixed interest rate on money held for an agreed upon time with early withdrawal fees
Certification of Deposit (CD)
big losses and cost of frequent transactions are risk of _______
speculation/day trading
two ways to purchase a bond
Treasury direct website, bond broker, commercial banks
Spreading out investments to reduce risk
Diversification
A retirement account offered through an employer
401K
fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets
Mutual Fund
Where does your credit score start?
0/no credit
Two reasons to invest in bonds
predictability and steady income
Two risks of speculation
big losses, cost of frequent trades, trade limits
Age at which you begin receiving social security disbursements
65
Gold is an example of this type of investment
Tangible/Commodity
maximum Adjusted Gross Income allowed for a single person opening a Roth IRA
$153,000
The probability that the issuer of the bond is unable or unwilling to make interest payments.
default risk
the surrounding factors that contribute to a company's stability as described by Warren Buffett
economic moat
Duration that your employer owns their contribution portion of your 401K
Vesting
this rule says your mortgage should be no more than ___% and total debt should be no more than ____% of Gross monthly income
28%, 36%
The mutual fund in which Drew Perry is invested.
FXAIX/Fidelity Index Fund