Economics
1. Supply and Demand: Gold-low supply, high demand...high price Sand-high supply, low demand...low price
2. Tariffs...Tax Quota...limit on amount of goods coming into the country Embargo...no trade
helps balance/control trade with other countries
3. Federal Reserve...controls the flow of money (tries to control inflation) through their member banks that are protected by FDIC using monetary policies which are: decrease interest rates-decrease the amount that banks hold in reserve-buy securities
4. Inflation...too much money, prices go up
More Economics
1. need money to make trade easier
2. Inversion...when companies leave a country for a better tax rate or economic conditions
3. opportunity cost...the amount of money involved in making decisions...going to the prom or babysitting
4. command economy...government controls, capitalism...economy is controlled by competition and free enterprise
Even More Economics
1. monetary policies...tools the Federal Reserve uses to control the flow of money
fiscal policies...laws Congress make
2. discretionary expense...military
3. SEC...Security and Exchange Commission...police the stock market
4. Time value of Money...your money won't be worth as much in the future...Inflation+Interest rates
5. trough...lowest point expansion...growth peak...top compression...downward trend
Banking
1. FDIC...government protects your money in a bank, and NCUSIF protects your money in a credit union CD...Certificate of
2. Deposit advantages...higher interest rates than accounts, safe disadvantage...can't touch it until time, rates could go up
2. Credit Card...buy now and pay later Cash Card...card with a specified amount on it Debit Card...swipe it, money comes out of your checking account
3. Roth IRA...taxed now, NO TAXES on withdrawal Traditional IRA...taxed deferred, no taxes now, taxed on withdrawal
4. Return Check Fee-Overdraft Fee-Insufficient Funds Fee...all mean you were charged a fee for writing a check you didn't have the money for, Stop Payment Fee...wanting the bank NOT to pay a check, ATM Fee...using a different machine than your bank's, Monthly Maintenance Fee...just to keep your account, Minimum Balance...lowest amount needed so you don't get a fee charged
Credit
1. Closed End Credit...has an end to the loan (installments- house payment, car payment), Open End Credit...always stays open (revolving-credit card)
2. Principal...original amount borrowed, APR...annual percentage rate, APR is used to figure out how much interest to pay for borrowing money by multiplying Principal X APR
3. Collateral...something of value the lender holds until you pay off your debt
4. Debt to credit ratio is a comparison of the amount of debt being used compared to amount of credit that is available...the smaller the fraction, the better the number
Buying a Vehicle
1. A down payment is cash you pay upfront...lowers the amount financed which lowers the monthly payment and interest paid since you are borrowing less.
2. MSRP is the manufacturers suggested retail price. It is usually the highest price for that car
3. credit score drops, repossession of their car, insurance rates would go up
4. A recall means there is something wrong that needs to be fixed.
Car Insurance
1. Premium...what you pay to have the policy
2. Replacement Insurance...replaces at today's cost
3. No fault insurance...no person is to blame, insurance pays their policy holder's damages according to their policy
4. deductible is what the policy holder has to pay before the insurance company pays anything
5. 50/100/20...first number: bodily liability per person, second number: total bodily liability, third number: property damages
6. Comprehensive Insurance: acts of God, fire, thief, etc Collision Insurance: when you hit something
Health Insurance
1. HMO...see a primary caretaker first, less expensive PPO...can see any doctor in your network without a referral, more costly
2. Car deductible...paid every accident and usually lower amount than healthcare, Health deductible...paid each year
3. Primary Caretaker...family doctor, first doctor you would see, in-network doctor is one that your insurance company approved, Out of network doctor...any other doctor not approved by your carrier, specialist...doctor that concentrates on one type of procedure
4. Co-pay is what you pay before you see a doctor, coinsurance is the percentage you pay for a procedure, deductible is what you pay before the insurance company pays anything.
5. both can give you the same amount of coverage, but whole life cost more. Term insurance is for a short time and cost less, Whole life last your whole life, cost more, cash value
General Insurance
Investing
1. Dividend...pays the investor for just owning that stock, even if the stock price goes down you make money
2. Bank Accounts...place to just hold money, CDs...certificate of deposit and first stage of investing, Bonds...loans and less risk, Mutual Funds...group of stocks and bonds and less risk than just stock, Index Fund...group of similar stocks, Stock...owning a part of a company and highest risks but biggest rewards
3. Bond is a loan, corporate...company bond, municipal...state and local bond, treasury...US Government
4. Having your money in many different types of investments.
5. Bull Market...stocks going up Bear Market...stocks going down
6. earned income...money you worked for (pay check) money your money made (interest, dividends, etc)
Earnings and Taxes
1. Gross income...all the money you make Net Income...the amount you actual take home Take Home Pay...net income Adjusted Gross Income...gross income + capital gains/losses, Taxable Income...adjusted gross income minus deductions
2. Itemize...list of all deductions, Standard deduction...using the number the government gives everyone
3. FICA...Federal Insurance Contributions Act...taken out of your paycheck for Social Security + Medicare, lowers your pay check
4. Tax Deduction lowers your taxable income where a tax credit lowers the amount of your tax
5. W-4 use to determine how much comes out of your paycheck, W-2 shows everything that was taken out
Buying a House
1. mortgage is your house payment, amortization shows how much goes to the principle and how much goes to interest
2. 2 advantages to owning: it is yours, builds equity...2 disadvantages: taxes, repairs
2 advantages to renting: easier to move, no cost for repairs...2 disadvantages: no equity, raise rent
3. 1st and last months rent, and a security deposit
Retirement and Estate Planning
1. Living will is a medical directive for while you are alive and can't make decisions and gives someone the power of attorney, a regular will divides your assets to your beneficiaries after you pass
2. 401(K) is a retirement plan...employer may have a matching contribution, money for the future
3. Roth IRA...deposited money is taxed now, but no taxes on withdrawal, a Traditional IRA is taxed deferred
Money Management
1. Protection from identity theft: 1) Pay for a company to protect your computer 2) Change passwords 3) Be careful on how you share your information
2. Budget: A plan for spending and saving money. A fixed expense would be a car payment. A variable expense would be an electric bill.
3. Salary: set yearly pay adv. count on the same each month, dis. usually no overtime
Wage: hourly rate adv. could get overtime, dis. could get hours cut
Commission: percentage pay adv. make a lot of money, dis. could make nothing
4. Ponzi Scheme...tricking people in believing in an investment and paying them with other people's money but there isn't any real investment
Financial Literacy
1. Bait and switch is a sales technique that lures people into a store with a great deal only to find out that they are sold out and then they try to sell you on a more expensive item
2. Recruiting Scheme where sales people at the top make money and the people at the bottom lose money because they can't return unsold items
3. Class action suit is where a group of people sue a company together
4. Rebate is getting money back on a purchase
5. placing items in front of consumers to maximize the opportunity to sell it, candy at the checkout counter, items in movies
Concepts
1. An entrepreneur is a person who runs their own business
Risks: lose everything, work long hours
Rewards: financial success, you are the boss
2. Finance a business...loans, investors, personal money
3. CFPB is a governmental agency that helps protect consumers concerning purchases, credit, loans, banking, etc
example: charging unusually high interest rates for a loan
4. people on a fix income like retired people, low income people, lender (repaid money is worth less)
1. Supply and Demand: Gold-low supply, high demand...high price Sand-high supply, low demand...low price
2. Tariffs...Tax Quota...limit on amount of goods coming into the country Embargo...no trade
helps balance/control trade with other countries
3. Federal Reserve...controls the flow of money (tries to control inflation) through their member banks that are protected by FDIC using monetary policies which are: decrease interest rates-decrease the amount that banks hold in reserve-buy securities
4. Inflation...too much money, prices go up
More Economics
1. need money to make trade easier
2. Inversion...when companies leave a country for a better tax rate or economic conditions
3. opportunity cost...the amount of money involved in making decisions...going to the prom or babysitting
4. command economy...government controls, capitalism...economy is controlled by competition and free enterprise
Even More Economics
1. monetary policies...tools the Federal Reserve uses to control the flow of money
fiscal policies...laws Congress make
2. discretionary expense...military
3. SEC...Security and Exchange Commission...police the stock market
4. Time value of Money...your money won't be worth as much in the future...Inflation+Interest rates
5. trough...lowest point expansion...growth peak...top compression...downward trend
Banking
1. FDIC...government protects your money in a bank, and NCUSIF protects your money in a credit union CD...Certificate of
2. Deposit advantages...higher interest rates than accounts, safe disadvantage...can't touch it until time, rates could go up
2. Credit Card...buy now and pay later Cash Card...card with a specified amount on it Debit Card...swipe it, money comes out of your checking account
3. Roth IRA...taxed now, NO TAXES on withdrawal Traditional IRA...taxed deferred, no taxes now, taxed on withdrawal
4. Return Check Fee-Overdraft Fee-Insufficient Funds Fee...all mean you were charged a fee for writing a check you didn't have the money for, Stop Payment Fee...wanting the bank NOT to pay a check, ATM Fee...using a different machine than your bank's, Monthly Maintenance Fee...just to keep your account, Minimum Balance...lowest amount needed so you don't get a fee charged
Credit
1. Closed End Credit...has an end to the loan (installments- house payment, car payment), Open End Credit...always stays open (revolving-credit card)
2. Principal...original amount borrowed, APR...annual percentage rate, APR is used to figure out how much interest to pay for borrowing money by multiplying Principal X APR
3. Collateral...something of value the lender holds until you pay off your debt
4. Debt to credit ratio is a comparison of the amount of debt being used compared to amount of credit that is available...the smaller the fraction, the better the number
Buying a Vehicle
1. A down payment is cash you pay upfront...lowers the amount financed which lowers the monthly payment and interest paid since you are borrowing less.
2. MSRP is the manufacturers suggested retail price. It is usually the highest price for that car
3. credit score drops, repossession of their car, insurance rates would go up
4. A recall means there is something wrong that needs to be fixed.
Car Insurance
1. Premium...what you pay to have the policy
2. Replacement Insurance...replaces at today's cost
3. No fault insurance...no person is to blame, insurance pays their policy holder's damages according to their policy
4. deductible is what the policy holder has to pay before the insurance company pays anything
5. 50/100/20...first number: bodily liability per person, second number: total bodily liability, third number: property damages
6. Comprehensive Insurance: acts of God, fire, thief, etc Collision Insurance: when you hit something
Health Insurance
1. HMO...see a primary caretaker first, less expensive PPO...can see any doctor in your network without a referral, more costly
2. Car deductible...paid every accident and usually lower amount than healthcare, Health deductible...paid each year
3. Primary Caretaker...family doctor, first doctor you would see, in-network doctor is one that your insurance company approved, Out of network doctor...any other doctor not approved by your carrier, specialist...doctor that concentrates on one type of procedure
4. Co-pay is what you pay before you see a doctor, coinsurance is the percentage you pay for a procedure, deductible is what you pay before the insurance company pays anything.
5. both can give you the same amount of coverage, but whole life cost more. Term insurance is for a short time and cost less, Whole life last your whole life, cost more, cash value
General Insurance
- personal property and liabilities...renter's insurance does not cover the dwelling
- dwelling, personal property, liabilities
- wind, fire, water
- a home owner must have insurance covering 80% or the insurance company will only cover the percentage bought (a $300,000 home would require $240,000 worth of coverage)
- an additional policy added to cover things like jewelry, rare items, paintings, etc.
Investing
1. Dividend...pays the investor for just owning that stock, even if the stock price goes down you make money
2. Bank Accounts...place to just hold money, CDs...certificate of deposit and first stage of investing, Bonds...loans and less risk, Mutual Funds...group of stocks and bonds and less risk than just stock, Index Fund...group of similar stocks, Stock...owning a part of a company and highest risks but biggest rewards
3. Bond is a loan, corporate...company bond, municipal...state and local bond, treasury...US Government
4. Having your money in many different types of investments.
5. Bull Market...stocks going up Bear Market...stocks going down
6. earned income...money you worked for (pay check) money your money made (interest, dividends, etc)
Earnings and Taxes
1. Gross income...all the money you make Net Income...the amount you actual take home Take Home Pay...net income Adjusted Gross Income...gross income + capital gains/losses, Taxable Income...adjusted gross income minus deductions
2. Itemize...list of all deductions, Standard deduction...using the number the government gives everyone
3. FICA...Federal Insurance Contributions Act...taken out of your paycheck for Social Security + Medicare, lowers your pay check
4. Tax Deduction lowers your taxable income where a tax credit lowers the amount of your tax
5. W-4 use to determine how much comes out of your paycheck, W-2 shows everything that was taken out
Buying a House
1. mortgage is your house payment, amortization shows how much goes to the principle and how much goes to interest
2. 2 advantages to owning: it is yours, builds equity...2 disadvantages: taxes, repairs
2 advantages to renting: easier to move, no cost for repairs...2 disadvantages: no equity, raise rent
3. 1st and last months rent, and a security deposit
Retirement and Estate Planning
1. Living will is a medical directive for while you are alive and can't make decisions and gives someone the power of attorney, a regular will divides your assets to your beneficiaries after you pass
2. 401(K) is a retirement plan...employer may have a matching contribution, money for the future
3. Roth IRA...deposited money is taxed now, but no taxes on withdrawal, a Traditional IRA is taxed deferred
Money Management
1. Protection from identity theft: 1) Pay for a company to protect your computer 2) Change passwords 3) Be careful on how you share your information
2. Budget: A plan for spending and saving money. A fixed expense would be a car payment. A variable expense would be an electric bill.
3. Salary: set yearly pay adv. count on the same each month, dis. usually no overtime
Wage: hourly rate adv. could get overtime, dis. could get hours cut
Commission: percentage pay adv. make a lot of money, dis. could make nothing
4. Ponzi Scheme...tricking people in believing in an investment and paying them with other people's money but there isn't any real investment
Financial Literacy
1. Bait and switch is a sales technique that lures people into a store with a great deal only to find out that they are sold out and then they try to sell you on a more expensive item
2. Recruiting Scheme where sales people at the top make money and the people at the bottom lose money because they can't return unsold items
3. Class action suit is where a group of people sue a company together
4. Rebate is getting money back on a purchase
5. placing items in front of consumers to maximize the opportunity to sell it, candy at the checkout counter, items in movies
Concepts
1. An entrepreneur is a person who runs their own business
Risks: lose everything, work long hours
Rewards: financial success, you are the boss
2. Finance a business...loans, investors, personal money
3. CFPB is a governmental agency that helps protect consumers concerning purchases, credit, loans, banking, etc
example: charging unusually high interest rates for a loan
4. people on a fix income like retired people, low income people, lender (repaid money is worth less)
