Savings accounts
What does liquidity mean?
How easily something (an asset) can be turned into cash
What is the term associated with buying a variety of stocks and bonds
Diversifying
Name a function of banks
hold deposits, provide loans, pay interest
What do we do with expenses according to the planning fallacy
Name one factor that is used to calculate credit scores
(Payment history, debt owed, new credit/hard inquiries, credit mix, length of credit history)
Which is the least liquid account
CD
Which retirement account makes you pay taxes when you withdraw money from your account when you retire
401K
False
What do we do with savings according to the planning fallacy
Overestimate our ability to save
When is the best time to start building credit?
Now
Which account has the lowest yield?
Checking Account
Why would banks pay you interest
If you have a savings account
What would be an example of an unplanned cost we would ignore when budgeting?
Gifts or emergency funds
Your reliability/ track history of paying back your debts
What is the word that means earnings generated over time?
Yield
What is a bond
Money that is borrowed from you by the gov or a corporation
Name a quality banks would look for in a person lending money from the bank
Credit Scores, steady income, etc
Is the planning fallacy limited to budgeting?
No
What is the biggest downside of having a bad credit score?
Increased interest on loan payments
Which account requires a high minimum balance?
Money Market account
What is the name of a mix of stocks and bonds that is managed by a portfolio manager and who is bought by many people's pooled money
Mutual Fund
Name a type of loan
Mortgage, car, student, medical, credit builder
What is the word within the planning fallacy that means a shortcut in our brain?
Cognitive Bias
Is income a part of your credit score? T/F
False