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Financial Decisions
Question | Answer |
---|---|
Needs: | things people must have to live |
Wants: | things people like and desire |
Short term goal: | a statement about what a person wants to do that can be reached in a short amount of time: 1 day - 1 year |
Long term goal: | a statement about what a person wants to do that can be reached in 1 year - 5 years |
Savings plan: | a plan to save (or spend) money in order to reach a financial goal |
Goods: | touchible items that can be purchased, example: a shit, a car , a movie ticket |
Services: | activities that can be purchased, example: lawn service, massage, house cleaning |
Opportunity cost: | the cost that is paid when you give up something to get something else; a trade off, example: if I buy this ice cream cone I will not have enough money to buy a new shirt |
Inflation: | the cost of goods and services rises over time |
Human capital: | skills, talent and/or education a person has |
Income | amount of money you earn or receive from different sources |