Investing
A CD investment money in a certain (or length of time)
True or False
True
Early withdrawal may incur penalties
Its always best to follow your impulse when shopping
True or False
False - usually better wait some bit of time
A bank will charge a higher interest rate when they think there is more or less risk?
More
Time value of money means you start saving for retirement sooner or later
Sooner
Starting at age 22 vs age 30 or 40 will increase money hughly
Your personal portfolio refers to __________
The different places you have chosen to invest your savings
Bank, insurance, 401K, mutual funds
Its best to borrow money to buy things like every day expenses... Yes or No
No - If you do it may indicate you are 'living outside your means"
Compounding interest means ______
Pays interest on the interest previously earned (assuming it is reinvested)
APR (or Annual Percentage Rate) on a loan includes interest and _________
Fees and charges that a bank or lending store may charge to loan you money
To 'spread your risk" you should ______ your investment portfolio
Diversify
Some industries (investments) go up while others go down - spread risk having a little of each
A mutual fund invest in one stock - True or False
False
A mutual fund invests in variety of stocks
Using a credit card will always cause you to pay interest
Yes or no and how?
No - if you pay it off at end of month
Your investment portfolio should never have any high risk investments
True or False - Why?False - may choose to have small % of your money in high risk as inflation hedge.
A mortgage in when you borrow money for you car
True or False
False
Refers to borrow money for your house or vacation home
Describe one way to build a good credit record
Get a credit card (or maybe 2) and then sue them and pay them off EVERY month
The best stock exchange to use is NYSE , NASDAQ, AEMX or something else
Something else (generally does not matter)
Which exchange an investment is traded on does not matter so much as the actual stock or industry
If you use a credit card to pay for groceries (every day living expense), then you are 'borrowing money'
True or false - Why
Only true if you do not pay off at end of month
Saving vs investing - describe difference
Investing means you are trying to 'grow you money' to use much later - typically retirement or college tuition
Investing in a 401K allows you to defer paying _____ on that money
Taxes
Salary put in a 401k is not taxed government
Small or medium capitalization stock are companies with less than ________ in stock
$5 billion
Lure you in with low price on one products but then steers you to different product once you are in
Can happen on online as well (Seen it with Amazon monthly subscription purchases)
Budgeting concepts may apply to money or time
True or falseTrue
You budget time and you can budget money
"I will budget 2 hours to do my homework"
The interest rate on a 'second mortgage' or 'vacation home' will generally be lower or higher
Why?
Higher
Borrowing for a second house is a higher risk - so the bank or lending facility wil want a higher interest to offset that risk.
One disadvantage of 401k investing -- you can't use the money now
Tru or False
True
Money put in a 401K is to left alone