Vocab
What is a want?
A desire to possess
What are two examples of things you can invest in?
Stocks and bonds
What is a need?
equire (something) because it is essential or very important.
How does a pension work?
Money goes into the pension on behalf of the employee while the employee works for the organization.
What are examples of short term goals?
A new pair of shoes, money for shopping
What is the rule of 72?
a simple way to determine how long an investment will take to double given a fixed annual rate of interest.
What is one benefit when it coms to investing?
Potential for long term returns
What is an asset?
a useful or valuable thing, person, or quality.
What is a 401(K) and how does it work?
What is one strategy to save towards your goal?
Keep extra money saved up
What does FDIC stand for ?
The Federal Deposit Insurance Corporation
Why may you need to worry when investing in a stock?
The potential for risk
What is Diversification?
the action of diversifying something or the fact of becoming more diverse.
What is a traditional IRA?
a type of individual retirement account that lets your earnings grow tax-deferred.
What are examples of long term goals?
College, retirement, house
What Is Liquidity
how quickly you can get your hands on your cash
Why may someone choose to invest in a stock?
Could possibly grow wealth.
What is Maturity Date?
the date on which the principal amount of a note, draft, acceptance bond, or other debt instrument becomes due.
What is a Roth IRA?
A Roth IRA is an individual retirement account that offers tax-free growth and tax-free withdrawals in retirement.
What is an example of a medium term goal?
Gas money, Vacation costs, concert ticket costs.
What is compound interest?
the interest you earn on interest.
When should you start investing?
As soon as your budget can support it.
What is the Rate of Return
the net gain or loss of an investment over a specified time period, expressed as a percentage of the investment's initial cost.
Your total retirement benefit will depend on the risk level of the investments you chose is ...
401(k), traditional IRA, Roth IRA.
Why is it helpful to break down the total amount you would need to save on a monthly, weekly, or daily basis?
It is important because this gives you an idea of how much money you need to be saving if you want to be able to afford certain goals.