Intro to Personal Finance
What is Financial Literacy?
The knowledge and skills necessary to manage your own finances.
What are hard skills?
Technical skills that you learn on the job or in school.
What percentage of Americans is actually budgeting?
35%.
What are the three types of government spending?
Mandatory, discretionary, and Interest on National Debt.
What does it mean to invest in stocks?
It means you buy a small piece of ownership in a company.
What are liabilities?
Debts.
What is a resume and how long should it be?
A document summarizes your job history, education history, any special skills or training you have, and any accolades. They should be one page.
What is a variable expense?
An expense that fluctuates each month.
What is it when you spend more than you make or what you don't have?
Deficit Spending.
What are bull and bear markets?
When the market is bull, the prices go up. When the market is bear, the prices go down.
What percentage of Americans is living in some sort of debt?
72%.
What three traits does a mentor have?
Accomplished, understanding, and caring.
What are the four walls?
Shelter, food, transportation, and utilities.
What is the difference between income tax and consumption tax?
Income tax is tax on money you earn, consumption tax is tax on money you spend.
Small-cap Mutual Fund.
What is interest?
The fee that one must pay for borrowing money from a lender or the cost of doing business.
What three things make up your sweet spot?
Talents (skills), passions, and values.
The idea that our money will be worth more now than in the future is the...
Time Value of Money.
Which three wealth taxes does Ohio not have?
Estate, inheritance, and gift taxes.
What is the difference between an IRA and a 401(k)?
An IRA is account is created/started by an individual while 401(k)s are offered by employers/companies.
Goals must be... (five things).
Specific, measurable, time-sensitive, your own, and realistic.
What are the four ways of putting the Proximity Principle into action?
Entry-level jobs, internships, volunteering, and conversations.
What is zero interest and why should you stay away from it?
A common marketing scheme that promises no interest charged on a product, however this period is limited, after which interest is charged, including that which would've been applied during the zero interest period.
What is the difference between a W-2 and a W-4?
A W-2 is filled out by the employer regarding your income taxes while a W-4 is filled out by the employee.
What are the four things you NEVER do when investing?
Never invest in something you don't understand. Never borrow money from your retirement account to invest. Never invest for tax savings. Never borrow money to invest.