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Economics shits
shit for eco
| Question | Answer |
|---|---|
| Investing is for... | long-term goals, less liquid, higher risk, possibly higher returns, building net worth/wealth. |
| Saving is... | emergencies, limited risk, more liquid, low returns (0-4%), financial security, big purchases. |
| Investing | The process of setting money aside to increase wealth over time for long-term financial goals such as retirement |
| Investment | Assets purchased with the goal of providing additional income from the asset itself but has a risk of loss. |
| Financial Literacy | The ability to understand and effectively use various financial skills such as personal finance management, budgeting, and investing. |
| Personal Finance | All the financial decisions an individual family must make in order to earn, budget, save, invest, spend, and give money over time. |
| Rule of 25 | Multiply your annual expenses by 25. This is what you'll need to retire. |
| 4% Rule | If you were to withdraw 4% of your retirement fund, that's a year's worth of expenses. |
| Principal | The money that you originally invested. |
| Simple Interest | Interest earned calculated using principal only. |
| Accrued Interest | The interest that has been accumulated since the original investment but has not been paid out yet. |
| Compound Interest | The interest on savings calculated on both the initial principal and the accumulated interest. |
| Rule of 72 | 72 divided by the annual interest rate equals the years it will take to double |
| Liquid Asset | An asset that can be easily bought or sold. Ex. cash, stocks, bonds, mutual/index funds. |
| Debt Security | Financial assets that define the terms of a loan between an issuer (borrower) and an investor (lender). |
| Equity Security | Financial assets that represent shares of a corporation. |
| Stock | A security that represents part ownership or equity in a company (or companies). |
| 401k benefit one | Pre-tax account |
| 401k benefit two | investments grow tax defferred |
| Traditional IRA one | money grows tax deferred contribution |
| Traditional IRA two | taxed when withdrawn |
| Roth IRA one | Money grows tax free |
| Roth IRA two | not taxed if withdrawn |
| Anything else? | Real estate- ownership of residential property |
Created by:
furrycurry
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