Chapter 1
What is The First Foundation?
Save a $500 Emergency Fund
What are the Four Walls?
Food, utilities, shelter, and transportation
Why do some accounts, like savings accounts at your local bank, earn interest?
Because the bank pays you to use your money
Banks and lenders use credit scores to determine
The likelihood that someone is able to repay debt
What is discretionary spending?
Purchasing nonessential goods or services
Net Worth = _____ - _______
Assets - Liabilities
Net income is the amount you get paid ___ taxes.
After
Which two habits are the most important for building wealth and becoming a millionaire?
Consistently investing money and giving it time to grow
What is the difference between appreciating assets and depreciating assets?
Appreciating assets increase in value over time
Depreciating assets decrease in value over time
What is the digital marketing strategy that tracks users across the web?
Retargeting
Personal Finance is 80% what and 20% what else?
80% Behavior and 20% Head Knowledge
Going to the movies is an example of what types of expenses?
Discretionary and variable
Which principle says that a certain amount of money today is worth more than the same amount in the future?
Time Value of Money
What is a Merchant Fee?
When Credit card companies charge a store a 2–3% fee for every purchase customers make with credit cards.
the financial opportunity that is lost when you choose to do something else with your money
In 1972, what association made borrowing money to attend college much easier than it had been?
The Student Loan Marketing Association (SLMA) or Sallie Mae
What is a cash-flow statement
a record that summarizes all of the income and outgo (spending) over a certain time period
It shows you what has already happened with your money
The amount of interest charged on a debt but not yet collected is called...?
Accrued Interest
What is the difference between a secured and unsecured loan for the creditor?
Secured loan the borrower puts up collateral. In an unsecured loan the borrow does not put up collateral.
Describe how companies use Transfer/Fantasy advertising technique in marketing
they create an ad that uses the names or pictures of famous people, but not their direct quotations, to convince you that the product will help you imitate the famous person in the ad
What was the purpose of the New Deal?
To promote economic recovery and social reform
What should you do if you overspend in one category of your budget?
Adjust your budget by removing money from other spending categories.
How can you outpace inflation with your investments?
Your rate of return needs to be at or higher than 3% per year
What is the debt snowball?
List your debts from smallest to largest. Make the minimum payment on all debts. As you pay off a debt, add its minimum payment to the next debt payment
List at least 2 of the 4 examples of how a thief would commit card fraud
-Card skimmers at gas stations and ATMs
-intercepting and opening mail from your mailbox
-stealing your card info from online purchases
-charging you too much at restaurants.