Vocabulary
This is the basic economic problem of having unlimited wants but limited resources.
What is scarcity?
This type of card takes money directly out of your bank account when you make a purchase.
What is a debit card?
This represents ownership in a company that you can buy and sell on the stock market.
What is a stock (share)?
In the book, this is something that takes money out of your pocket, like a car loan or credit card debt.
What is a liability?
This branch of government is responsible for making laws in the United States.
What is the Legislative Branch?
This term describes the value of the next best alternative you give up when making a decision.
What is opportunity cost?
What is the difference between a HYSA and a savings account?
A HYSA account offers a higher interest rate than a regular savings account.
What information does a stock quote show you? Name three items.
current price
previous close
daily change
trading volume
52-week high and low
How are the mindsets of rich dad and poor dad different? What advice do they each give Richard?
Poor dad- go to school, get a good job,
Rich dad- get an education + learn about financial literacy, assets/liabilities. do not rely on the government for retirement.
Congress passes a new law about minimum wage. The President signs it, and later courts are asked to decide whether it follows the Constitution. This situation shows all three branches working in this system.
What is checks and balances?
A student is deciding whether to spend $10 on lunch or save it, while a business decides how many workers to hire—both are examples of decisions studied in this branch of economics.
What is microeconomics?
This document shows your deposits, withdrawals, and current balance over a period of time.
What is a bank statement?
You check a company’s financial report and see what it owns (like cash and equipment) and what it owes (like debt). What is this called?
Company's financial health
A person buys a house, but instead of living in it, they rent it out to generate monthly income. This reflects the idea of building this type of income.
What is passive income?
This branch includes the House of Representatives and the Senate.
What is the Legislative Branch?
The government is analyzing inflation, unemployment, and economic growth across the entire country—this falls under this branch of economics.
What is macroeconomics?
This box on a credit card agreement clearly displays important information like interest rates, fees, and penalties so consumers can compare cards.
What is the Schumer Box?
Name three differences between a Roth IRA and a 401K?
What motivated Richard to make money at the beginning of the book?
He was poor, did not have money like the rest of his classmates. He was excluded from a pool party because his classmates thought he was poor.
A new law is created, but the Supreme Court strikes it down because it violates the Constitution. This shows this power of the Judicial Branch.
What is judicial review?
When the price of sneakers drops and more people start buying them, while stores also begin stocking more pairs, this model explains how buyers and sellers interact in the market.
What is supply and demand?
A worker notices their paycheck is smaller than expected. What type of taxes could have affected their paycheck?
What are federal income tax, state income tax, and FICA taxes (Social Security and Medicare)?
An investor leaves money in the stock market for many years, and their earnings also start earning returns over time, causing their investment to grow faster.
What is compound interest (compound growth)?
According to the book, financial intelligence is made up of understanding of what four areas?
accounting, investing, markets, law.
A conflict arises between a state law and the U.S. Constitution. The Supreme Court rules that the Constitution takes priority over the state law. This principle is called this.
What is supremacy of the Constitution (Supremacy Clause)?