Saving
An emergency fund is usually how many months of expenses? (from the ppt in Schoology)
3-6 months
Investing is generally associated with (blank) risks.
higher
True or False: Higher risk can mean higher reward.
True
What is a 401(k)?
An employer-sponsored retirement savings plan
What allows you to spread your investments across different asset classes to reduce risk?
Diversification
Saving involves setting aside money for what type of goals?
Short Term Goals
What do stocks represent?
Ownership in a company
Which is generally riskier: stocks or bonds?
stocks
What is a Roth IRA?
A retirement account where withdrawals are tax-free
What is the stock market index that tracks 500 large U.S. companies?
What is the stock market index that tracks 500 large U.S. companies?
What does “pay yourself first” mean?
Put money into savings before spending
What are dividends (simple)?
Profits shared with stockholders
What is the term for how much your investment grows or shrinks over time?
Rate of Return
Why should you start saving early for retirement?
Compound interest grows your money over time
What is dollar-cost averaging?
Investing a fixed amount regularly regardless of price
What does CD accounts stand for?
Certificates of Deposit
What are bonds?
Loans to governments or companies that pay interest
Which is safer: a savings account or the stock market?
Savings Account
What does an employer match mean?
Free money your company contributes when you do
What does "liquidity" mean in investing?
How easily you can turn an investment into cash
What is the main difference between saving and investing?
Saving is low risk with guaranteed returns; investing has higher risk and potential growth
What does diversification mean?
Spreading money across different investments to reduce risk
What is inflation risk?
The risk that prices rise faster than your investments grow
What is compound interest?
Interest earned on both the original money you invested and the interest that money has already earned.
What is a mutual fund?
A pool of money from many investors used to buy a mix of stocks/bonds