Investing
What is interest?
The amount a lender charges a borrower and is a percentage of the original amount loaned
What is inflation?
A general increase in prices and a fall in the purchasing value of money.
What is a bond?
A loan you give to a company or government that pays you interest over time
What is a credit card?
Credit cards are a payment mechanism allowing users to purchase goods or services on credit, essentially borrowing money from the card issue
What is an example of something you can take out a loan for?
House (mortgage), car, education
What is compound interest?
The idea that the more time your money has to grow, the more you earn on both the original money and the interest
What is a debit card?
A card issued by a bank allowing the holder to use their own money from their bank account.
What is a fixed expense?
An expense that is the same every month
What is the S&P 500?
Index that tracks the performance of 500 large U.S. companies
What is an example of the danger of Credit Cards?
-High-interest debt
-Overspending
-Credit Score Damage
What is the 50/30/20 rule?
50% needs
30% wants
20% savings/debt repayment
What is systematic risk?
This is an unavoidable risk, such as interest rate changes or recessions.
What is a credit score?
A credit score is a three-digit number, typically between 300 and 850, that is designed to represent your credit risk, or the likelihood you will pay your bills on time.
What is the difference between net vs. gross income?
Gross: total amount of money you earn before taxes or deductions
Net: How much money you take home after taxes or deductions