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EPF M3 Review
Economics & Personal Finance Module 3 Review
Term | Definition |
---|---|
Financial Plan | Ongoing process that will support both your current needs and your future needs, such as retirement. |
Wealth | The amount of money you have left over after you list your assets and subtract your debt. |
Cost of Living | The amount of money needed to cover basics such as housing, food, taxes, and healthcare. |
Budget | The best estimate of revenue and expenditures to help guide financial choices in a future period of time. |
Saving | Setting aside for a purchase in the near future through savings accounts, money market accounts, or certificates of deposit. Slow growth and low risk. |
Investing Speculating | Owning a share of a business with the expectation that you will get a higher return. Examples include stocks, bonds, and real estate. Better returns than savings, but more risk. |
Speculating | Gambling money with the goal of getting a high return in a short period of time such as day-trading. Very high risk and potentially high reward or loss. |
Investment Vehicle | A way for an individual to invest their money with the hopes of growing it. |
Stocks | Shares in the ownership of a company. |
Dividends | Distribution of company profits to its shareholders. |
Bonds | Companies and governments will issue bonds as a way to raise money. Individuals are essentially lending companies or governments money in this format. |
Maturity Date | When the bond issuer is expected to repay the initial amount borrowed. |
Coupon Rate | The interest rate on a bond. |
Mutual Funds | A portfolio of stocks and bonds that is invested in by a group of people that is professionally managed. |
401k | An employer-sponsored retirement plan that provides for potential investment growth, tax advantages, and opportunities to build your wealth. |
IRA | Individual retirement account plan that provides for potential investment growth, tax advantages, and opportunities to build your wealth. |
Altruism | When we do something to help promote someone else’s well-being, even when it costs us something. |
Philanthropy | Doing something to promote someone else’s well-being with the goal of increasing the well-being of the world and/or mankind. |
501c Organization | An organization classified as either a private foundation or public charity for tax purposes. |
Charities | Organizations that help raise money for those in need. |
Non-Profit Organization | The organization’s goal is to not generate income, but to serve a cause. |
Public Charity | Charities that generally receive a greater portion of their financial support from the general public or government, and have greater interaction with the public. Examples include churches, schools, hospitals, and medical research organizations. |
Private Foundation | Service organizations typically controlled by members of a family or by a small group of individuals that receive much of their financial support from fewer sources. |
Donation | Something, such as goods or a sum of money, is given to charity. |
Crowdfunding | The idea of raising funds for a project or cause through a large group of people online. |
Community Service | Voluntary work intended to help people in a particular area. |
Service Learning | A form of service that helps the community, but it is tied to a curriculum at school. |