Chapter 6
the act of finding something out
from a French word meaning “to sum up” or a summary
Resume
the state of being satisfied with who you are and what you have in life
Contentment
a legal claim (or right to own) against an asset until the debt (loan) is repaid
Lein
: the persistent rise in the cost of goods and services over time
Inflation
someone who supports, guides, and advises another person over a period of time
Mentor
: buying anything without planning to do so in advance
an asset that increases in value over time
Appreciating Asset
: the percentage of principal charged by the lender for use of its money
Interest Rate
: someone who starts and runs their own business
Entrepreneur
: the spot where what you love to do the most intersects with the things you do the best
Sweet Spot
the theory that spending money and consuming goods is good for the economy
Consumerism
when the value of an asset falls below what is owed on it
Negative Equity
concept that an amount of money is worth more today than in the future due to earning potential
Time value of money
a widely recognized perception or impression of an individual based on conduct, experience, skills, and actions
Personal Brand
: the idea that you should connect with people who are doing what you want to do and get in the right places in order to find new opportunities related to your dream job
Proximity Principle
: the financial opportunity that is lost when you choose to do something else with your money
Opportunity Cost
the original amount of a loan; the total amount borrowed before fees and interest
Principal
: the amount of interest charged on a debt but not yet collected; interest accumulates from the date a loan is issued
Accrued Interest
: technical skills (typically learned) demonstrated with a level of competency requiring IQ (intelligence quotient)
Hard Skills
character traits and interpersonal skills requiring EQ (emotional quotient) that guide how you interact with others
Soft skills
the part of your brain that controls memory, impulses, and thoughts
Prefrontal Cortex
: the increase in value of a home over time; the difference between the amount owed and what the home could be sold for
Equity
the average rate of growth for an investment over time; often expressed as an annual figure
Compound Growth