Goals, Human Capital, & Decision Making
True or False: The higher your education level, the higher your average lifetime wages.
True
Which tax form do you use to file your annual income taxes?
1040 form
Which banking method is likely to decline over the next 20 years?
Visiting the bank branch
True or False: Investing is best for short-term goals because it’s risk-free.
False — investing is for long-term growth
What form of payment would you use to repay a friend electronically?
Person-to-person payment
What type of required education does a plumber need?
Trade-school/ Apprenticeship
If Isaiah earns $3,000 and takes home $2,500, what is his gross pay and net pay?
Gross = $3,000, Net = $2,500
What is the FDIC, and what does it do?
Federal Deposit Insurance Corporation — protects bank deposits up to $250,000
Saving for a laptop you’ll buy within one year is an example of what?
Saving
What is a shareholder?
Someone who owns part of a company through shares
How does education level relate to unemployment?
There’s a correlation between higher education and lower unemployment rates
What does IRS stand for, and what do they do?
Internal Revenue Service; collects federal taxes
What is overdraft protection, and what is one truth about it?
It covers transactions when you overspend — but average fees are $25+
What does it mean when a stock market bubble occurs?
Stock prices rise too quickly and aren’t supported by real company value
Which type of tax increases as your income increases?
Progressive tax
What is the best example of human capital?
A stock broker uses math to help an investor
Which form do you receive from your employer at the end of the year to report wages?
W-2 form
What is a withdrawal on a bank statement?
Money taken out — e.g., a debit card purchase for concert tickets
What is the real rate of return if nominal return = 10% and inflation = 3%?
7%
Early in your career, which risk level makes the most sense for retirement investing?
High risk — you have time to recover
What does the acronym P.A.C.E.D. stand for?
Problem, Alternatives, Criteria, Evaluation, Decision
What is the purpose of a W-4 form?
Tells your employer how much to withhold for taxes
What is one smart tip for using online or mobile banking safely?
Use strong passwords and keep them private
What risk is most important to avoid when saving short-term?
Market Risk
Saving for retirement over 40 years is an example of what?
Investing (long-term goal)