Chapter 1 Flashcards
financial plan
A financial plan is a goal-based activity that incorporates your future income plan (career goals), budget plan (spending goals), investment plan (gaining assets goals), insurance plan
(protection goals), and estate plan (giving goals).
money personality
the style and habits of money
management
personal values
the
qualities and beliefs that are
most important to you and to
which you must be true to lead
a happy and fulfilling life
voluntary simplicity
a simplified lifestyle, reducing
unvalued consumption to focus
on other priorities
Frugal
avoiding waste; to be
resourceful when fulfilling one’s
need for goods and services
financial literacy
ability
to understand how money is
earned, invested, and spent,
and the risks and rewards of
financial decisions
downshifting
reducing expenditures by deliberately
cutting back income or
expenditures or both, in the
pursuit of financial
independence
dollar-cost averaging
investing a fixed dollar amount
at regular intervals
investment account
account that enables you to
invest in stocks, bonds, mutual
funds, or other securities with
the objective of making a profit
vision statement
a picture of your desired future
that provides a sense of purpose
mission
a purpose for being
personal mission
statement
formal
statement that reflects your
strengths, passions, gifts, and
stakeholders
long-term goal
objective
to be reached in five or
more years
intermediate goal
objective to be attained in
one to five years
short-term goal
objective to be reached in
less than one year
