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Stack 4
Unit 4
| Question | Answer |
|---|---|
| Social Security | A federal program that provides monthly benefits to millions of Americans, including retires, military families, surviving families of deceased workers, etc. |
| Pension | A retirement account, offered in some job sectors or companies, that an employer maintains to give an employee a fixed payout at retirement |
| 401k | A retirement savings plan, sponsored through your employer who will often match your contributions, that allows an individual to save for retirement and have the savings grow while deferring taxes until funds are withdrawn |
| Transfer of Risk | A risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. |
| Insurance | A company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. |
| Premium | What you pay to have insurance |
| Deductible | What you pay before insurance kicks in. |
| Co-Insurance | Percentage you pay after you have paid the deductible and before out of pocket max |
| Liability | Protects you financially if you're responsible for someone else's injuries or property damage. |
| Collision | Coverage that helps pay to repair or replace your car if it's damaged in an accident with another vehicle or object. |
| Comprehensive | Coverage that protects against damage to your vehicle caused by non-collision events that are outside of your control. This includes theft, vandalism, glass and windshield damage, fire, accidents with animals, weather, or other acts of nature. |
| Outsourcing | A business practice in which services or job functions are hired out to a third party on a contract or ongoing basis. |
| Acceptance of Risk | When a business or individual acknowledges that the potential loss from a risk is not great enough to warrant spending money to avoid it. |
| Investing Risk | Past performance is no guarantee of future results. |
| Retirement Accounts | Money saved or invested to be use in retirement. |
| 401k | An employer-sponsored retirement savings account that is funded with pre-tax money and employer matching |
| Roth IRA | An individual retirement account allowing a person to set aside after-tax income up to a specified amount each year |
| IRA | An individual retirement account allowing a person to set aside income with deferred taxation, when they withdraw funds. |
| Stock | A share in the ownership of a company, including a claim on the company's earnings and assets |
| Bond | Issued by governments and corporations when they want to raise money, or in other words they are borrowing money from you |
| Collectables | Items that are worth far more than their original sale price and are considered alternative investments, such as art, baseball cards, and memorabilia. |
| Commodities | Raw materials or primary agricultural products. |
| Real Estate | Land and property that generates income through rentals. |
| Index Fund | Investment funds that follow a benchmark index, such as the S&P 500 or the Nasdaq 100. |
| Mutual Fund | A pooled collection of assets that invests in stocks, bonds, and other securities. |
| Savings Account | A bank account that earns interest. |
| Principal | The baseline sum in financial transactions—the initial amount invested or borrowed. |
| Compound Interest | The interest on savings calculated on both the initial principal and the accumulated interest from previous periods. |
| Over sharing | A process of saving in excess of the amount capable of being absorbed by investment that is regarded by some economists as a major cause of depressions in the modern economy. |
| Certificate of deposit | A certificate issued by a bank to a person depositing money for a specified length of time. |
| Pay yourself first (PYF) | Setting aside money for savings before paying bills and making other purchases while still keeping up with debt obligations. |
| Liquidity | How easy it is to turn an asset into cash without losing a lot of value. |
| Direct Deposit | The deposit of funds electronically into a bank account rather than through a physical, paper check. |
| Overdraft | A deficit in a bank account caused by drawing more money than the account holds. |
| Non-Sufficient Funds NSF | The status of a checking account that does not have enough money to cover all transactions. |
| Deposit | A sum of money placed or kept in a bank account, usually to gain interest. |
| Reconciliation | The accounting process by which two different data sets are compared to verify that the information within them is accurate. |
| Checking | An account held at a financial institution that allows deposits and withdrawals |
| Savings | Represents a net surplus of funds for an individual or household after all expenses and obligations have been paid. |
| Bank | A bank is a "for profit" financial institution licensed to receive deposits and make loans. |
| FDIC: Federal Deposit Insurance Corporation | An independent federal agency insuring deposits in U.S. banks in the event of bank failures. The FDIC insures deposits up to $250,000. |
| Credit Union | A nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates. |
| NCUA: National Credit Union Administration | An independent federal agency that insures deposits at federally insured credit unions up to $250,000. |
Created by:
Higley