Chapter 1
This is an example of a liquid asset.
Money in your bank accounts, savings accounts, cash.
Assets - Liabilities =
Net worth
Cash inflow is...
Cash outflow is...
Money received / Money you spend
What is inflation?
A general increase in the price of goods and services.
The cost of pursuing one option instead of another is called this.
Opportunity Cost
Going to a movie with a friend instead of going to work and making money is an example of what?
Opportunity cost
What is a common example of a forecast?
Budget
Medium Term goals are ones that can be accomplished in what amount of years?
1-5 years
What does COLA stand for and what does it mean?
Cost of Living Adjustment, an annual raise equal to annual inflation rate
A projection about what will happen in the future is called this.
Forecast
List 3 examples of things you NEED to spend money on.
bills, rent, car note, etc.
Purchasing what helps reduce your level of risk?
Insurance
Fixed expenses are...
Variable expenses are...
Expenses that don't change / do change.
Frictional unemployment is when...
You job switch
Something that you own that can be converted to cash rapidly and without a risk of signficant loss is called this.
Liquid asset.
Why is a car not a liquid asset?
You can not guarantee you'll get the amount of money you spent on it back.
What is a type of retirement fund?
401(k) or 403(b)
Someone with a high tolerance for risk is someone that is likely to...
Make riskier decisions.
The "Graying of America" means what?
Unemployment due to the recession phase of the business cycle is called this.
Cyclical unemployment.
When you are unable to pay your bills, you may have to file under this legal process.
Bankruptcy
What does equity mean in terms of personal finance?
Ownership of something
2 examples of Discretionary spending are...
personal spending / entertainment / charitable giving
FICA taxes benefit what demographic?
Older generation (Baby boomers)
Financial issues that affect an individual is called this.
Personal finance.