Basic Finance questions
When talking about personal finances what does
"live within your means" mean?
Spend less than or as much as you earn, don't rely on debt to buy things,
Name 3 forms of common investments?
Stocks (ownership in companies), bonds (loans to companies/government), mutual funds (group of investments).
will also accept real estate.
what do you put on an oil fire (usually kitchen)
Baking soda, salt, milk, put the lid on.
The total amount of money a person earns before any taxes, deductions, or benefits are subtracted
What is Gross pay
What is the average interest rate on a credit card
20-27%
How does a debit card work
Whatever you buy or pay for with your debit card immediately comes from your account.
What is the interest that builds up over time called, and what is your best friend when it comes to retirement?
Compound Interest and Time is your best friend.
What is the PASS method for using a fire extinguisher
Pull the pin
Aim at the base of the fire
Squeeze the handle to release the agent
Sweep the nozzle side to side until fire out.
the amount of money you receive after all deductions have been subtracted from your gross pay
What is net pay
What is the average rate of student loans?
3.2%-8%
Private lenders are lower than federal, depends on credit score.
How does a credit card work
You are given a credit limit by a bank or CC company, you can purchase or pay for things without money coming from your account. At the end of a billing cycle you can make a payment to the CC to pay off the money you spent.
CC's require a minimum payment each month and love to charge interest.
what would be the difference in value of a retirement account that started at 18 years old vs 22 years old. they both contribute $100/ month get a 10% return and both stop at age 62. Be with in $50,000 for credit.
18= $947,748
22 = $632,405
Difference = $315,343
What is a safe distance to stand away from a fire to use fire extinguisher ?
6-10 Ft
List 3 deductions that can come out of a pay check.
Federal or state tax
medicare
social security
dependant care
medical and retirement.
What is the rule of 72
divide 72 by the interest rate gives you the length of years it will take to double .
Ex 72/6=12 years
72/10 = 7.2 years.
what is the range for credit scores
300-850
300- poor
850 amazing
IRA - Individual retirement account
money is taken from your paycheck before taxes are removed and invested.
Lowers your taxable income Now - pay taxes later when you withdrawl.
Can be used to extinguish a small fire or grease fire. Considered a one use item, not a fire extinguisher.
Fire Blanket
What does ROI stand for
Return on investment.
what is the 50/30/20 rule
Basic plan for finances.
50% needs
30% wants
20% savings/invest/debt repayment
What is your credit score used for? give 3
Loans - auto loans, mortgages, and the rate you will get
Credit card applications - approval vs denial, amount of credit and the rate
Landlords - if you are looking to rent they may run your credit.
Insurance companies - used to assess your risk and rates they give.
Employer - especially if you are going into a position that requires financial responsibility.
How does a roth IRA work
Money is invested after you have already been taxed. The money grows tax free and you do not need to pay taxes on it when you withdraw.
You can also withdraw money put in without penalty.
how many types of fire extinguishers are there?
5
Water
foam
dry chemical
carbon dioxide
wet chemical
The type of tax system used in the USA?
Graduated/ progressive tax system.
What is the 4% rule
In retirement, withdraw 4% of the balance to live off
1million 4% = $40,000
This rule is starting to be questioned. if its enough