Intro to investing
What is compound interest?
Interest earning on top of interest
How many months does your emergency fund need to cover?
3-6 months
Short codes or symbols used to identify companies on the stock market.
Ticker symbol
The rivalry between businesses to attract customers by offering better products or prices.
Competition
the money you earn or receive
Income
This bias overestimate their knowledge, skills, or ability to predict market movements.
Overconfidence bias
A special amount of money you set aside just in case something unexpected happens!
Emergency fund
These are payments a company gives to its shareholders from its profits.
Dividends
The desire and ability of consumers to buy a product or service.
Demand
the things you spend money on
Expenses
This bias makes investors follow the crowd rather than making independent decisions.
Herd mentality bias
This is like a loan you give to a company or the government.
Bond
Instead of buying individual stocks, you buy a small part of this basket.
Mutual funds
This is like a collection or a mix of different investments you own inside your IRA
Portfolio
This expense stays the same each month
Fixed expense
Strategy that involves spreading your money across different types of assets, to reduce overall risk.
Diversification
You put a certain amount of money into the THIS and agree to leave it there for a set time, like 6 months or 1 year.
Certificate of Deposit
This is the value of what you give up when you choose one investment over another.
Opportunity cost
The amount of a product or service available to consumers.
Supply
This expense changes from month to month
Variable expense
What is dollar cost averaging?
Dollar Cost Averaging (DCA) is an investment strategy
where you invest a fixed amount of money regularly,
regardless of the asset’s price at that time. The benefits of dollar cost averaging are
It usually pays higher interest than a regular savings account, so your money grows faster.
Money Market Account
This is a special kind of mutual fund that tries to copy a whole group of stocks called an index.
Index funds
This is a special type of savings account that helps people save money for when they retire.
IRA (Individual Retirement Account)
This means you earn enough money to cover your family’s basic needs without needing a lot of help from others or the government.
Financial self-sufficiency