PF Basics
Financial issues that affect an individual
What is personal finance
Food, water, clothing and shelter are these
What are needs?
Buying a new phone is an example of this type of financial goal
What is short-term?
According to the Chapter, as education level increases, this also usually increases
What are earnings/wages?
This worldwide resource can be used to research major purchases, investment performance and financial calculators
What is the internet?
Process of planning every aspect of your personal finances
What is personal finance planning
Something you would like to have, but do not required
What is a WANT?
Saving enough money to purchase a house is an example of this type of goal
What is long-term?
According to the Chapter, people with more education are generally less likely to experience this
What is unemployment?
CFP and CPA are examples of these, which indicate a certain level of financial training or expertise
What are professional credentials/certifications
Cash is an example of this type of asset
What is liquid?
This means the value of what you give up when you choose one option instead of another
What is OPPORTUNITY COST?
Three categories of financial goals discussed in this Chapter
Short term
Intermediate term
Long term
Besides your interests, you should look into this financial factor when considering a career
What is expected pay/earnings/wages?
When selecting a financial advisor, you should ask whether the advisor's area of THIS matches your needs
What is expertise?
Personal financial planning includ3es planning these FOUR major areas of your finances
What are:
spending, borrowing/financing, saving and investing?
Lindsey needs jeans. A $20 pair meets her needs, but a $100 pair represents this
What is WANT?
Starting to save for a home while you are young can reduce this
What is the amount of money you need to save regularly?
What are time and money?
Even if you hire a financial professional, this PERSON remains responsible for monitoring your investments and judging the advice received.
Who is YOU (the individual investor)?
According to the reading, good planning and money management can provide emotional benefit in addition to helping you afford things you want
What is financial security/peace of mind?
You earn $8 per hour and give up a 4-hour workshift to attend a $10 movie. Including the ticket, what is the total opportunity cost?
$42
8*4=$32 in lost wages, + $10 ticket
$32 + $10= $42
Financial planning can allow someone to build a wealth early enough to have this option at ages 40 or 45
What is retirement?
The chapter says planning for this after high school is an important part of long-term financial planning
What is post-secondary education or training?
The letters CFP and CPA stand for
What are
Certified Financial Planner AND
Certified Professional Accountant