Lesson 1: Saving and Investing (Part 1)
Automatically saving a portion of your paycheck for future uses.
Paying Yourself First.
An interest-bearing account where people put money for future use
Savings account
Interest that is only paid on the original principal.
Simple interest
The possibility of financial loss or physical harm.
Risk
Pays for medical bills and prescriptions.
Health
A fee received or paid for the use of money
Interest
A share of a corporation sold to the public
Stock
Interest on the principal and the accumulated interest on a deposit or a loan.
Compound interest
A contract that outlines coverage plans and protects a person against financial loss or damage.
Insurance Policy
Offers protection for cars and drivers.
Auto
To commit money to gain a profit or earn interest
Invest
An IOU issued by a company, municipality, or the federal government in exchange for a loan from an investor that will be repaid with a set rate of return
Bond
Something you will need in six months or less.
Short-Term Goal
The amount paid for an insurance policy.
Premium
Refunds the cost of travel in the event of cancellation; may also cover medical expenses while traveling.
Travel
The amount of money originally invested
Prinicipal
A professionally managed investment with money pooled from shareholders to buy a collection of stocks or bonds of various companies.
Mutual Fund
Saving anywhere from one to live years or even 20 years or more.
Long-Term Goal
Money paid out of pocket before insurance covers the remaining costs.
Deductible or Co-Pay
Pays a benefit to survivors in the case of death.
Life
The next best alternative given up when making a financial choice
Opportunity Cost
Accounts that are safe and offer higher interest rates than saving accounts, while also requiring larger amounts of money for longer periods of time.
Certificates of deposit (CDs)
What insurance companies use to set premiums.
Statistics
Designed to offer liability protection and property coverage for theft and fire.
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