Building Wealth
What is net worth?
Assets minus liabilities.
What is diversification?
Spreading investments to reduce risk
What is a good credit score used for?
Loans, mortgages, apartments, lower interest rates.
What is a mortgage?
A loan to buy a home.
What is generational wealth?
Wealth passed from one generation to the next.
What's an asset?
Something that has value.
What does an ETF stand for?
Exchange-Traded Fund.
What does APR stand for?
Annual Percentage Rate.
What is a down payment?
Money paid upfront toward a home purchase.
Name one way families build generational wealth.
Investing, homeownership, businesses.
What's a liability?
Something you owe money on.
What is a dividend?
A payment some companies make to shareholders.
Why are high-interest credit cards risky?
Debt grows quickly.
Why is home equity valuable?
It builds ownership and wealth.
Why is having a will important?
It helps ensure assets are distributed according to your wishes.
Why is multiple income streams helpful?
More financial security.
What is dollar-cost averaging?
Investing a set amount regularly regardless of market prices
What is debt-to-income ratio?
Debt payments compared to income.
Name one cost besides the mortgage.
Taxes, insurance, maintenance, HOA fees.
Besides money, what else can families pass down?
Knowledge, education, businesses, values, and financial habits.
Name three ways to build wealth.
Investing, owning businesses, real estate, saving consistently
Why is investing early important?
More time for compound growth.
What's generally better: paying only the minimum or paying more?
Paying more than the minimum.
What is refinancing?
Replacing a loan with a new one, often for better terms.
What is one of the biggest keys to building generational wealth?
Consistent investing, avoiding unnecessary debt, planning ahead, and teaching financial literacy to future generations.