investments
Q: What is a stock??
A: A stock represents a small ownership share in a company. When you buy a stock, you become a shareholder.
Q: What is a 401(k) plan??
A: A 401(k) is an employer-sponsored retirement savings plan that allows employees to invest money for retirement, often with tax advantages.
Q: What is income tax??
A: Income tax is money people pay to the government based on the income they earn.
A: Income tax is money paid to the government based on the income a person or business earns.
Q: What is the name of the wrestling move where a wrestler jumps from the top rope and lands on an opponent with their body?
A: A body splash.
Q: What is diversification, and why is it important??
A: Diversification means spreading your investments across different companies, industries, or asset types. It can reduce the impact of one investment performing poorly.
Q: What is an employer match in a 401(k)??
A: An employer match is when your employer contributes money to your 401(k) based on how much you contribute. For example, an employer might match 50% of your contributions up to a certain percentage of your salary.
Q: What is a tax deduction??
A: A tax deduction reduces the amount of income that is subject to tax, which can lower the amount of tax you owe.
Q: Who is known as “The Heartbreak Kid”?
A: Shawn Michaels.
Q: What is the difference between a stock and a ond??
A: A stock represents ownership in a company, while a bond is essentially a loan made to a company or government. Stocks generally offer more growth potential but can have greater price fluctuations.
Q: What is the difference between a traditional 401(k) and a Roth 401(k)??
A: Traditional 401(k) contributions are generally made before taxes and are taxed when withdrawn. Roth 401(k) contributions are made with after-tax money, but qualified withdrawals in retirement are generally tax-free.
Q: What is the difference between a tax credit and a tax deduction?
A: A deduction reduces your taxable income, while a credit directly reduces the amount of tax you owe.
Q: What is the main advantage of contributing to a 401(k) retirement plan??
A: A 401(k) allows you to save for retirement with potential tax advantages. Traditional 401(k) contributions can reduce taxable income today, while Roth 401(k) contributions are made with after-tax money and can provide tax-free qualified withdrawals later.
Q: What was the name of the professional wrestling group formed by Hulk Hogan, Kevin Nash, and Scott Hall in WCW?
A: The New World Order (nWo).
Q: If an investment earns 8% per year, why doesn't investing $10,000 for 10 years simply give you $18,000?
A: Because of compound growth. If the returns are reinvested, you earn returns on both your original investment and previous returns. At 8% compounded annually, $10,000 would grow to about $21,589 after 10 years.
Q: Why might someone choose to contribute enough to a 401(k) to receive the full employer match?
A: Because the employer match is essentially additional compensation. If an employer matches part of your contribution, failing to contribute enough to receive the full match can mean missing out on money toward your retirement.
Q: If someone earns $50,000 but has $5,000 in tax deductions, how much income is generally subject to tax before considering other adjustments?
A: $45,000 ($50,000 − $5,000).
Q: What is the difference between a deductible and a premium in insurance?
A: A premium is the amount you regularly pay to maintain your insurance coverage. A deductible is the amount you generally have to pay out of pocket for a covered claim before the insurance company begins paying its share.
Q: Which wrestler was the first person to win the WWE Championship, World Heavyweight Championship, Intercontinental Championship, and United States Championship?
A: Edge.
Q: What is the relationship between risk and expected return in investing?
A: Generally, investments with greater uncertainty or risk require a higher expected return to compensate investors for taking that risk. However, higher risk does not guarantee higher returns—it means the range of possible outcomes is wider, including larger loses
Q: Why can asset allocation become increasingly important as someone gets closer to retirement?
A: As retirement approaches, there is less time to recover from a major market downturn. A person may therefore adjust their investment mix to balance growth with reducing the risk of large losses, depending on their goals, risk tolerance, and other sources of retirement income.
Q: Why might someone receive a tax refund even if they owed taxes during the year?
A: A refund can happen when a person had more tax withheld or paid in estimated taxes than their final tax liability. The excess is generally returned to them as a refund.
Q: Why might an investor prefer a tax-advantaged retirement account over a regular taxable investment account?
A: A tax-advantaged retirement account can reduce or delay taxes on investment growth, depending on the type of account. In a taxable account, dividends, interest, and realized capital gains may create tax liabilities along the way. However, retirement accounts can have contribution limits and restrictions on withdrawals.
Q: At WrestleMania 30, who ended The Undertaker’s legendary WrestleMania undefeated streak?
A: Brock Lesnar.