Financial Literacy Basics
What is financial literacy?
The ability to understand and use financial skills like budgeting, saving, investing, and debt management.
What is the difference between assets and liabilities?
Assets are what a company owns; liabilities are what it owes.
What is one tool that can help track expenses and create a budget?
Mint, YNAB, or Excel.
Why is salary negotiation important?
It ensures fair pay and helps you maximize earnings over time.
What is a short-term financial goal?
Examples include saving for an emergency fund or paying off a small loan.
Why is financial literacy important?
It helps individuals achieve financial security, stability, and build generational wealth.
What is the difference between revenue and profit?
Revenue is total income; profit is what remains after expenses.
Why should you start investing early?
The earlier you start, the greater your financial security due to compound interest.
What is one strategy to prepare for a salary negotiation?
Research industry salaries and know your market value.
What is one way to manage credit wisely?
Paying bills on time, keeping debt low, and monitoring your credit score.
What is one key area of financial literacy?
Options: understanding corporate finance lingo, budgeting, investing, and salary negotiation.
What does ROI (Return on Investment) measure?
How much profit an investment generates relative to its cost.
What is the difference between CapEx and OpEx?
CapEx is spending on assets like equipment, while OpEx covers daily operational expenses.
Besides salary, name one benefit you can negotiate in a job offer.
Health insurance, stock options, remote work flexibility, or professional development funds.
Why is it important to surround yourself with financial mentors?
They provide guidance and help you make smarter financial decisions.
How does financial literacy break the cycle of financial insecurity?
It provides tools to manage money wisely, build wealth, and plan for the future.
What does EBITDA stand for?
Earnings Before Interest, Taxes, Depreciation, and Amortization.
What is market capitalization?
The total value of a company’s outstanding shares.
What is one financial challenge women often face in the workplace?
Gender pay gaps and career advancement barriers.
What is liquidity, and why is it important?
Liquidity measures how easily assets can be converted to cash; it's important for financial flexibility.
What are two long-term financial goals someone might have?
Retirement savings, homeownership, or starting a business.
What is the P/E Ratio used for?
It determines if a stock is over- or under-valued.
What are two ways companies return value to shareholders?
Stock buybacks and dividends.
What is one long-term financial effect of failing to negotiate salaries?
Losing out on compounded raises, bonuses, and retirement savings over time.
What is the best lifelong financial habit to commit to?
Continuously educating yourself on financial literacy and adapting to new financial strategies.