UNEMPLOYMENT & INFLATION
What is inflation?
A general increase in prices and a fall in the purchasing power of money.
What is a stock?
A share of ownership in a company.
What is an ETF?
An Exchange-Traded Fund, a basket of securities that trades like a stock on an exchange.
What is equity in real estate?
The difference between the market value of a property and what is still owed on the mortgage.
What is a ponzi scheme?
A fraudulent investment scam where returns are paid to earlier investors using money from new investors.
What is unemployment?
When people who are able and willing to work cannot find a job.
What is the DOW JONES?
A stock market index of 30 large, publicly-owned U.S. companies.
What is an index fund?
A fund designed to track the performance of a market index like the S&P 500.
What is a mortgage?
A loan used to purchase real estate, paid back over time with interest.
What is a pyramid scheme?
A scam where members recruit others to invest; profits are made from recruitment, not actual sales or investments.
What is the unemployment rate formula?
Unemployed/Labor Force x 100
Difference between stock & stock index?
A stock is a share in one company; a stock index tracks the performance of many stocks.
Pros of investing in index funds?
Low fees, broad diversification, and historically solid long-term returns.
What is the difference between renting and owning?
Renting means paying to use a property owned by someone else; owning means you hold the title to the property.
How are both pyramid and ponzi schemes similar?
Both rely on recruiting new participants to pay returns to earlier ones, and both collapse when new investors stop joining.
How does inflation affect purchasing power?
As inflation rises, the value of money decreases, meaning people can buy less with the same amount of money.
What companies are in the S&P 500?
500 of the largest publicly traded companies in the U.S., like Apple, Microsoft, and Amazon.
What is passive investing?
Investing in a broad market index and holding it long-term without frequent trading
How can real estate make you money?
Through appreciation (value increase), rental income,
What are the red flags of investment fraud?
Promises of guaranteed returns, pressure to invest quickly, lack of transparency
What is deflation?
When prices decrease
What type of stocks are listed on NASDAQ?
Tech
How does investing in an index fund help with diversification?
Index funds include a large number of companies across various industries, spreading out risk.
What is house flipping?
Buying a property, renovating it, and quickly reselling it for a profit.
Who was Bernie Madoff and what did he do?
He ran the largest Ponzi scheme in history, defrauding investors of billions of dollars.