Credit
Credit card cash advances
Provided by credit card companies-withdraw cash with a credit card-you pays a higher interest rate.
Collision coverage
Collision coverage on your car insurance policy will repair damages to your vehicle when something collides with your vehicle. Consumers terminate/cancel the policy when the value of the car is less than the replacement paid out by the insurance company.
Sources of income
wages, rentals, interest, capital, profits, investments, entrepreneurship
Pay yourself first
Automatically route money from paycheck to savings (before paying bills)
Bear market
A bear market refers to financial markets that are experiencing a prolonged period of contraction or loss.
Consequence if paying the minimum payment due on a credit card bill or paying late
impacts credit score if paid late. If you are only paying the minimum payment each month you will take a much longer time to pay off the balance – you will greatly increase the total amount paid back due to APR charged per month.
Insurance deductible
A deductible is an amount that the insured has agreed to pay before the insurer is obliged to pay anything on a covered claim. The higher the deductible the lower the monthly premium (payment) – the lower the deductible the higher the monthly premium (payment).
Opportunity cost
next best alternative – it is what is given up when a choice is made.
CD
it is a time deposit offered at financial institutions-penality if cashed before maturity
a financial market that experiences an extended period of growth above the historical averages.
Credit Reports
a number representing the creditworthiness of a person, and the likelihood that person will pay his or her debts. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers.
Term life insurance
Term life insurance is an insurance policy that will pay a lump-sum benefit to your family or another beneficiary of your choice if you die while the policy is in effect. Is not a permanent life insurance policy.
Money orders
is a payment order for a pre-specified amount of
money and is purchased at different types of stores – it is used like a check. They are usually limited in maximum face value to some specified figure (for example, the United States Postal Service limits domestic postal money orders to US $1,000.00. US Postal money orders are hard to counterfeit.
overdraft protection
Overdraft protection is a feature offered by banks to keep your checking account from over-drafting when you write a check or swipe your debit card but don't have enough money in your account. It is a loan that is paid back.
Diversification
is when an investor has different types of investments (stocks, bonds, mutual funds, Treasury Bills, etc..) it reduces the risk of investing – not putting “all your eggs in one basket”
The length of debt repayment and impact on the cost
the longer you take to pay back a loan, the more you will pay in interest and principal overall.
Whole life insurance
Whole life insurance is a policy that is also a way to invest money. It is referred to as a permanent life insurance policy because, as long as you pay your premiums, the policy is yours for life, providing your loved ones with a guaranteed benefit upon your death.
Discretionary income or budget surplus
Not allocated for food or shelter
rule of 72
how long (many years) will it take to double an investment? Divide 72 by the interest rate to be
earned: 72 divided by 3% interest = 24 years (if you are given the number of years and need to determine the interest rate needed to double your money, then divide 72 by the given number of years: 72 divided by 24 years= 3% interest).
Mutual funds
a professionally managed investment vehicle that is made up of a pool of funds collected from many investors and invested in stocks, bonds, money markets, and securities. Managed by the fund manager. Mutual funds provide an easy way for small investors to diversify their investments.
Characteristics of predatory loans
Making loans to customers who are poor credit risk (low credit score) and making the customers pay extremely high interest rates.
Health insurance and co-pay
insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a monthly premium to ensure that money is available to pay for the health care benefits specified in the insurance agreement. A co-pay is the amount of money you pay out-of-pocket for a covered medical service. Co-pays are typically a flat dollar amount for a doctor's office visit, prescriptions or lab tests.
Role of treasury department
collects taxes, prints money, issues treasury bonds
Time value of money
is calculated by the value of money with a given amount of interest earned over a period of
time; the longer the time you keep your money invested, the more interest you will earn.
Treasury bill
short-term loans sold to operate the U.S. government. Amounts invested range from $1,000 to $5 million per investor. (Also known as T-Bills.)