Building Wealth
Define what it means to be rich.
Define a stock
What is a single share of a company, a portion of the ownership that is divided amongst all shareholders?
Define EPS.
What is earnings per share?
Define a mutual fund.
What is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt.
Define Bitcoin
What is a type of digital currency in which a record of transactions is maintained and new units of currency are generated by the computational solution of mathematical problems, and which operates independently of a central bank.
Define what it means to be wealthy.
What is having enough financial resources at your disposal to minimize your financial dependency on others? It is holding assets and investments that have longevity and can be passed down.
Define profits. (formula)
What is revenues minus costs?
Define diversification and why it is important.
Holding investments that are of various asset classes, geographies, sizes, and/or styles. Diversification lowers risk.
Define a passive investment.
What is a type of mutual fund or exchange-traded fund that seeks to track the returns of a market index?
Define decentralized
What is not having a third party involved?
WHAT IS THE MEDIAN FAMILY HOUSEHOLD INCOME IN AMERICA IN 2020? $37k, $49k, $68k, $72k
What is $68k?
Define a dividend and who receives them.
What is a set amount of money paid regularly to shareholders of a company?
Name three types of investment styles.
What is growth, value, and core?
Define an investment philosophy.
What is a set of beliefs and principles that guide an investor's decision-making process?
Define a central bank
A central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations.
What are 3-6 month expenses?
Define market capitalization. (formula)
What is price x number of shares?
Define P/E and when it is used.
What is price-to earnings per share valuation metric, used to value companies, and decide whether they are cheap, expensive, or fairly valued? It is a relative valuation metric, not an absolute valuation.
A mutual fund consisting of stocks within the S&P 500 would be what capitalization style?
Large Cap
Define how can Bitcoin be utilized within portfolio construction.
What is diversifying your investments from traditional assets?
Define a 401(k).
What is a tax-deferred employer retirement savings account?
Define why bonds are issued andand who issues them.
Bonds are issued by government corporations when they want to raise money. By buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.
Define the key risks of investing in an emerging market.
What are less mature financial markets, growing infrastructure, and unstable political institutions?
A mutual Fund consisting of stocks with high P/E ratios would typically be considered what type of fund?
Growth Fund
Define the blockchain
What is a distributed database that maintains a continuously growing list of ordered records, called blocks?