Types of Investments
Safe place for money with small interest. Low Risk. Low Return.
Savings Account
Helps pay for medical care
Health Insurance
Lets you borrow money up to a certain limit. You can carry a balance and pay it off over time, but interest may apply.
Credit Card
A financial arrangement where a lender provides money to a borrower with the expectation that it will be repaid, usually with interest
Loan
The process of setting aside money for future use instead of spending it immediately.
Saving
Financial protection for dependents. Low Risk. No return on investment.
Life Insurance
Protects home and belongings
Homeowner's Insurance
One other way besides cards to borrow money
Personal Loans, Lines of Credit, Peer-to-Peer Lending, 401(k) Loans, etc.
The smallest amount you must pay on your credit card bill each month to keep your account in good standing.
Minimum Payment
A straightforward way to calculate interest on a loan or investment. It is based only on the original principal amount and does not compound over time.
Simple Interest
Fixed-term investment with guaranteed interest. Low fixed risk.
Certificate of Deposit (CD)
Protects you financially if you're in an accident.
Automobile Insurance
Detailed record of your credit history, compiled by credit bureaus
Credit Report
The cost of borrowing money or the reward for saving it. It’s typically expressed as a percentage of the principal amount.
Interest
A metric used to evaluate the profitability or efficiency of an investment. It measures how much return you gain relative to the cost of the investment.
Return on Investment
Ownership in a company. High Risk.
Common Stocks
Temporary life coverage for a set period
Term Life Insurance
Directly linked to your bank account. When you use it, money is deducted immediately. No interest charges, no borrowing—just spending what’s already in your account.
Debit Card
Calculated on both the initial principal and the accumulated interest from previous periods. This means money grows exponentially over time.
Compound Interest
The process of allocating money or resources with the expectation of generating a return or profit over time.
Investing
Diversified investments managed by pros. Moderate/High risk. Variable return.
Mutual Funds
Permanent life coverage with a cash value component.
Whole Life Insurance
Requires full payment of the balance every month. No preset spending limit, but missing a payment can have serious consequences.
Charge Card
The yearly cost of borrowing money, expressed as a percentage. It includes both the interest rate and any additional fees charged by the lender, giving you a more complete picture of the total cost of a loan or credit card
APR (Annual Percentage Rate)
An investment strategy that involves spreading your money across different assets to reduce risk and improve long-term returns
Diversification