Budgeting
Which account earns interest? Savings or Checking?
Savings
True or False: Investing is for long-term goals
True
What account does the money come out of when you write a check?
Checking account
what are stocks?
partial ownership in a company
What is a bear and bull market?
Bull Market- prices are going up and people are confident in the market and investing
Bear Market- prices are going down and people are less confident in the market and are not investing as much
Which earns higher interest? Money Market Accounts or Savings accounts?
Money Market Accounts
What is the rule of 72 tell us?
how long it will take to double our money
what is a certificate of deposit (CD)?
A time deposit that earns a fixed rate of interest for a specified length of time.
What are mutual funds?
investment that pools money from many investors to purchase a portfolio of low risk securities
Should you pay yourself first? How do you do it?
yes, automatically transfer a portion of your paycheck into your savings account
Assets minus Liabilities
What helps your savings and investing grow at a faster rate?
Compounding
what is the 50/30/20 rule?
50% of income in needs, 30% in wants and 20% in savings/investing
What are dividends
payments made by companies to their shareholders based on the number of shares they own
Identify 3 things that impact stock prices
What is your savings account primarily used for? and how many months of expenses should you keep in it?
Incase of emergencies; 3 to 6 months
What is the risk/relationship when investing?
The higher risk investment, there is potential for a higher return
Which earns higher interest: CD or Savings Account and why?
CD because the bank knows the money will be on deposit longer, it is willing to pay a higher rate than on savings account where you could withdraw at any time. The longer the CD’s term the higher the rate is
What are capital gains?
The money/profit you made from selling the stock. It's the difference between the purchasing price and the price that asset was sold
What is Social Security?
it is a government program that pools contributions from current workers to fund retirement support benefits to those who are eligible
Which of these is a variable expense? Electricity Bill, Car Insurance, Rent, or Student Loan Payments
Electricity Bill
What does ETF stand for
Exchange Trade Fund- is a collection of securities, including stocks, bonds, commodities, currencies, and other investments, that investors can buy and sell on a stock exchange. When an investor buys shares of an ETF, they own a portion of the underlying investments, similar to buying shares of a mutual fund
What is the FDIC and how much do they cover up to?
Federal Deposit Insurance Corporation, they insure your savings up to $250,000
What is a safer/ less risky investment? Mutual funds or individual stocks
Mutual funds
What does your Credit Score tell financial institutions?
How responsible and timely you are on making your monthly payments. (shows the ability you have to pay things on time)