Saving
What is Saving?
Involves restricting expenses and keeping the unspend money in one's own custody for the pur[ose of accuulating it
What is Investing?
Is the act of buying an asset to generate returns from it over a period of time while also taking care of risk and volatility
What is interest?
Is a reward for lending money
What is Financial Institution?
Are companies engaged in the business of dealing with monetary transactions, such as deposits, loans, investments and currency exchange
Interest bearing deposit account held at a bank or credit union
What is its main objective?
Maintaining liquidty and meeting future expenses without hassle
If a person buys a gold and keeps it for years, what will happen to its value?
The value will increase and the gold is an investment
What is simple interest
Is interest computed on the principal, excluding previously earned interset
What is commerical banks?
financial insitituion which provide secutiy and convenience to customers, including accpeting deposits, providing loans to individuals and businesses and serving as payment agents within a country and between nations
Type of saving account which earns a higher interest rate than a standard saving account
What does having a high liquidity mean for a person?
Help with tough situations such as loss of employment
What can investing help with?
It can help fulfill intermediate and long term goals
What is Compound Interest
Refers to interest which is calculated on the initial principal as well as the accumulated interest of previous periods
What is investment banks
financial intermediaries which perform a variety of services for businesses and some government, including underwriting debt and equality offering, acting as an intermediary between security issues and the investing public and provide financial advisory services to companies.
What is Certificate of Deposit (CD)
Saving certificate with a fix maturity date and specified fixes interest rate
What is Liquidity?
Describes the degree to which a asset can be quickly bought in the market without affecting the asset's price
If inflation is the rate at which the general level of prices for goods and services rise and consequently what will happen
The purchasing power of currency will fall
What is the formula for Simple Interest?
Principle (P) x Rate of interest (i) x Amount of time (T) = Simple Interest
What is insurance companies
corporations which pool risk by collecting premiums from a large group of people who want to protect themselves against a particular loss, helping individuals and companies manage risk and preserve wealth
What is a Money Market Fund
Type of mutual fund which only invests in low-risk securities
What is the easy way to save?
pay yourself first
What is our focus?
beating the inflation rate with the widest possible margin
What is the formula for Compound Interest?
What is brokerage
intermediaries between buyers and sellers to facilitate securities transactions; brokerage companies are compensate via commission after the transaction has been successfully completed
What is Annuity
Is contract between an investor and a insurance company in which the company promise to make periodic payment to the investor