Vocabulary
A distribution of a company's profits to its share holders
Dividends
Investing in physical property, such as a home or commercial building
Real Estate
A digital or virtual currency that uses blockchain technology for security
Cryptocurrency
What is the current retirement age?
67
If you invest in the stock market, you are guaranteed a return on your investment.
FALLACY
Profit from selling an asset for more than its purchase price
Capital Gain
Type of investment where you loan your money to a company or the government that pays you interest
Bonds
What does the Federal Reserve typically do to control inflation?
Raises interest rates
What is the main benefit of investing early and consistently over a long period of time?
Compound interest
Investing in Large Cap stock is less riskier than investing in Mid Cap or Small Cap Stock
FACT
How quickly an investment can be converted to cash without losing value
Liquidity
An employer sponsored retirement savings plan that allows employees to contribute a portion of their paycheck to a tax-advantaged investment account
401(k)
This stock market index tracks the stock performance of the 500 largest U.S. companies and is generally regarded as a safe way to invest
S&P 500
Which market capitalization offers the lowers risk and usually performs well over time?
Large Cap
Keeping money in a savings account is safer and better for long-term growth.
FALLACY
A collection of all financial assets including stocks, mutual funds, IRAs, cash, and bonds.
Portfolio
A collection of stocks, bonds, or other securities purchased by many investors
Mutual Funds
At what age can you start to collect social security?
67
What is the rule of 72?
How many years it takes for your money to double at a given rate of return. (72/interest rate = years)
Bonds are risk free investments
FALLACY
Spreading investments across different assets to reduce risk
Diversification
Stock owned in companies that are located in developing countries, such as Mexico, India, and Russia. Generally regarded as the riskiest stock to invest in.
Emerging Market Stock
DAILY DOUBLE
In what year is social security funds anticipated to be depleted?
2034
How can tax-advantage accounts like a 401(k) or IRA boost long-term investing?
By allowing earnings to grow tax-free, which compounds faster.
You should sell your investments during a market shutdown to avoid losing money.
FALLACY
Selling during downturns locks in losses - staying invested often leads to recovery