Money
What is liquidity?
A measure of how quickly you can get your cash without loss of value.
What is a Certificate of Deposit (CD)?
A Certificate of Deposit (CD) is a time deposit that earns a fixed rate of interest for a specified length of time.
What is a credit report?
A credit report is a written statement of a consumer’s credit history.
What is diversification?
Diversification is the spreading of risk among many types of investments.
What are assets?
Assets are items of value that a person owns.
What is exemption?
An amount you may subtract from your income for each person who depends on your income to live (your dependents).
What is a finance company?
A finance company is an organization that makes high-risk consumer loans.
What is a credit score?
A credit score is the total of assigned points based on several factors that tells potential creditors the likelihood that you will repay debt as agreed.
When referring to the concept of diversification, what do people often say?
“Don’t put all of your eggs in one basket.”
What are liabilities?
Liabilities are money or debts owed to others.
What is disposable income?
It is the money you have left to spend, invest or save after taxes and other deductions (required and optional) are taken out of your paycheck.
What is a payday loan?
A payday loan is supplied by a third-party lender and it is supposed to help consumers get out of last-minute financial jams by offering a cash advance on an upcoming paycheck.
What is the Truth in Lending Act (TILA)?
The Truth in Lending Act (TILA) is a federal law enacted in 1968 with the intention of protecting consumers in their dealings with lenders and creditors. The Truth in Lending Act was implemented by the Federal Reserve through a series of regulations.
What is the bull market?
The bull market is a prolonged period of rising stock prices and a general feeling of investor optimism.
What is the formula to find your net worth?
Net worth = Assets-Liabilities
What is discretionary income?
It is the money you have left to spend, invest or save after taxes and other deductions from your paycheck, as well as necessities are paid (Necessities may include rent, clothing, food, bill payments, goods and services, and other typical expenses.)
What is a tax refund anticipation loan?
It is a loan provided by a third party against a taxpayer's expected refund. Technically, these haven’t been allowed since 2012, but banks are now giving short-term loans against tax refunds and charging very high fees.
What are the five C's?
1.Character (integrity)
2.Capacity (sufficient money to pay for obligations)
3.Collateral (assets to secure the debt)
4.Capital (net worth = assets – liabilities (what you own-what you owe))
5.Conditions (of the borrower and the overall economy)
What is the bear market?
The bear market is a prolonged period of falling stock prices and a general feeling of investor pessimism.
What do central banks do?
Central banks attempt to stop severe deflation, as well as severe inflation, in an attempt to keep excessive price changes to a minimum.
What are four sources of income?
1. Employment
2. Investments
3. Self-employment
4. Windfall
What types of loans have six-month grace periods?
- Direct Subsidized/Unsubsidized Loans
- Subsidized/Unsubsidized Federal Stafford Loans
- Some private student loans
What are three leading credit reporting agencies?
1.Equifax
2.Experian
3.TransUnion
What factors should you consider when determining whether an investment is appropriate for you?
1.Degree of safety (risk of loss)
2.Degree of liquidity (ability to get your money quickly without losing value)**
3.Expected dividends or interest
4.Expected growth in value, preferably exceeding the inflation rate
5.Reasonable purchase price and fees
6.Tax benefits (saving or postponing tax liability)
What is a 401 (k) Plan?
A defined-contribution plan for employees of companies that operate for a profit (most non profit organizations allow their employees to participate in a 403(b) plan.