Investments
Committing money to assets with the expectation that it generates returns
What is investment?
Loser
-100
What is budgeting?
Lucky draw
+100
A type of investment where loans are given to businesses by individuals and are paid back with interest
What is a bond
The sum total of your wealth or the difference between your assets and your liabilities
What is net worth
A special reserve made for contingencies
What is an emergency fund?
Resources with economic value (e.g., cash, property, investments) that can increase wealth over time.
What are assets?
A unit of measure that signifies part ownership in a company
What are stocks
Money to be paid back after a loan is given
What is interest?
Lucky Draw
+300
Loser
-300
The relationship between the potential return of an investment and the level of risk involved.
What is risk and return?
Assets put down to secure a loan
What is collateral?
The costs or money spent on goods and services.
What are expenses?
The process by which governments collect money from individuals and businesses to fund public services and infrastructure
What is taxation?
How quickly and easily an asset can be converted into cash without losing its value.
What is liquidity?
Financial obligations or things that must be repaid
what is a liability?
The importance of an emergency fund
It is the ability to handle emergencies when they arise without having to generate additional debt and having financial peace of mind.
Explain the term diversification.
It is a strategy of spreading investments across different assets or sectors to reduce risk. The idea is that by not putting all your money in one type of investment (like stocks, bonds, or real estate), you lower the impact of a single investment’s poor performance on your overall portfolio.