Banking
Earned and Unearned Income
What are the 2 sources of Income?
A financial investment that is considered a loan.
What is a bond?
To set money aside to go into savings before you pay your bills or spend any money
What is paying yourself first?
When you are lended money and you must pay it back (usually with interst)
What is a loan?
What product can you buy that will help protect you from the risk of loss?
What is insurance?
An allowance that reduces your taxable income because people depend on you for financial support
What is a tax allowance?
When you sell an asset for more than you paid for it.
What is a capital gain?
The alternative given up when a choice is made
What is opportunity costs?
These two establishments will loan money with very high interest rates
What are pawnshops and payday lenders?
Your out of pocket cost that you MUST pay before your insurance begins paying any bills.
What is a deductible?
The ease of turning an asset/money into cash
What is liquidity?
When a company is doing well they will sometimes share their profits with shareholders by paying _____.
What are dividends?
Allows you to earn interest on interest
What is compound interest?
The type of loan that the government pays my interest for me while I am enrolled as a full time or part time student
What is a Subsidized Student Loan?
A type of insurance policy that can be an investment if cancelled before you die, or it can be paid out in a lump sum to your beneficiary upon your death.
What is whole life insurance?
The money that is left over after bills are paid
What is discretionary income?
When the market value is decreasing?
What is a bear market?
The idea that earned money today is worth more than if it was earned tomorrow
What is the time value of money?
The amount of debt you currently have vs. how much credit you have available. Also known as credit utilization ratio
An insurance product that will replace some or all of your earnings when you cannot work due to injury or illness.
What is disability insurance?
Money that is not backed by gold
What is fiat money?
This is what shareholders do when they vote by email or electronically.
What is a shareholder proxy?
This department of the US government prints paper money and mints coins, issues treasury bonds, and collects taxes.
What is the US Treasury Department?
The legislation that requires lenders to disclose information about the line of credit (like interest rates, late payment fees, etc.)
What is the Truth in Lending Act?
You are elderly and need assistance from medical professionals to continue living at home
What is long-term care insurance?