Key Terms
The measurement of gain or loss generated on an investment relative to the amount of money invested
Return on Investment (ROI)
when prices in a financial market experience a prolonged decline
Bear Market:
You should invest 15% of your income for You should invest 15% of your income for _________?
retirement
a list of your investments
Portfolio:
The practice of dividing the money a person invests among different types of investments in order to lower risk
Diversification
an asset that can be easily bought or sold
Liquid Asset
a type of annuity that can vary in value based on the performance of the mutual funds inside it.
Variable Annuity
an employer-sponsored retirement plan that has a special tax treatment an employer-sponsored retirement plan that has a special tax treatment
Qualified Retirement Savings Plan:
a qualified retirement savings plan offered by a company to its employees who contribute money from their gross pay
401(k)
a description of the investing strategy the mutual fund management company will use to invest your money
Prospectus:
a tax-advantaged investing account that people use to save for retirement
Individual Retirement Arrangement (IRA):
a measurement of a section of the stock market, typically a weighted average of the prices of selected stocks
Stock Market Index
The third ingredient to building wealth is the The third ingredient to building wealth is the _______ of return.
rate
preparation of tasks to manage an individual’s assets after death
Estate Planning
The total dollar market value of a company or how much a company is worth the total dollar market value of a company or how much a company is worth
Capitalization
annuity that offers low, guaranteed rates of interest and fixed income payments in retirement
Fixed Annuity:
Capitalization (cap) refers to the total value of a company described in one of these three ways:
small,mid and large cap
Don‘t buy mutual funds unless you’re going to leave them alone for at least Don‘t buy mutual funds unless you’re going to leave them alone for at least ______ years.
5
What is The Fifth Foundation?
Build wealth and give
Relationship of expected return (profit you expect to make) compared to the amount of risk (amount you stand to lose if the price goes down) taken with a given investment
Risk-Return Ratio:
a distribution from the net profits of a company to its shareholders
Dividend
Which type of investment accounts will provide tax-free withdrawals at retirement?
Roth IRA
In a 403(b) ________ can allow their employees to save for retirement.
Non-profits
When you invest in a mutual fund, you are contributing to a pool of money that will be . . .
Invested in a mix of stocks, bonds and money market accounts.
Investing your money earns you more money because of_________.
Compound Growth