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Personal Finance Cheat Sheet
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Personal Finance Cheat Sheet
Investment Concepts
Risk and Return: risk is uncertainty in how much of an investment could be lost. generally the higher the risk the higher the return and vice versa.
Investing Definitions
Common investments
Insurance
Investment- are assets which you have obtain in order to provide future increases in value
portfolio- a collection of investments
Liquidity- the ability of an asset to be converted to cash quickly and without any price discount
Common Investments: Stocks, Bonds, Mutual Funds, Real Estate, Precious Metals, and Money Market.
Stock is ownership in a corporation.
Bond is lending money to an organization
a contract called a policy that protects against financial loss. most common types are life, hea;th, automobile, and property
Retirement
Banking
the time in life where you nlonger have to work to generate income
Account types:
checking and savings. access accounts via bank branches, ATM's, internet, and phone
Credit
Economic Influence
Economic indicators
credit cards: A card (usually plastic) taht can be used to borrow money or makle purchases
Unemployment Rate:
the percentage of individuals in a nation who are actively seeking employment but do not currently have a full-time or part-time job.
Interest Rate:
Affects the costs of borrowing. high interest tends to slow new investments because borrowing is more expensive.
Inflation:
Affects the price of goods and the cost of living.
Definitions
Making Money Grow
Asset- An item of econmic value which you own and which is cash or could be sold for cash
saving and debt investments: depositing money in a bank savings account sending your money to the bank.
Goal Setting
Life goals include education, family, career, lifestyle, home, and transprotation
Currency
Savings And Debt
Savings- initial deposit of $50 with 3.5% interest rate compounded monthly. s,all monthly deposits made as shown.
Debt- starting balance of $1000 with 18% interest rate compounded monthly
Faces on Money (US, Canada):
$5 Abraham Lincoln, Sir Wilfrid Laurie
$10 Alex Hamilton, Sir John A. MacDonald
$20 Andrew Jackson, Queen Elizabeth 2
$50 Ulysses S. Grant, W. L. Mackenzie King
$100 Benjamin Franklin, Sir Robert Borden
US Federal Reserve
Discount Rate: Interest rate at which banks borrow money from the government. in Canada, it is called the Overnight Rate.
Reserve Requirement: minimum level of cash a bank must have available for depositor withdrawals
Consumer protection
Unethical Business Practices: Bait and Switch Advertising, Greenwashing, Shilling, Spamming, Pyramid Scheme.