Chp 10 Flashcards
Money must have
Portability
Divisibility
Durability
Stability
The most influential women in media
Suze Orman
Can be carried anywhere
Portability
Breaks up
Divisibility
Value of money depends on
Supply
Available
Liquid money
Timed deposit
CD-Certified Deposit
Is on a subpratic of stability
Money
Not available
Non-Liquid money
Most liquid money
M1
Money that is quickly convertible committing to locking your money within a term and getting it back when term is over
M2+M1
Money market mutual funds
Puts money in safe investments
M2+M1
Least liquid like bonds
M3+ M2+ Less Liquid Deposits
Plastic money is
Credit cards
Are NOT money and are not included in M1, M2 or M3 when measuring the motions money supply
Credit cards
Gonna hold onto your money for a fixed period of time (a investment)
CD
Buying a company, cities or states debt lending money in order to cover debt
Bond
Step one is
Open a checking and savings account
Chase is example of a
Commercial Bank
Lends your money (invests)
The invests in stocks, bonds and private equity
Commercial Bank
ONLY does mortgages and financing boats
Savings and Loan Associations
Instead of paying interest they disrupt money across dividends
Co-op banking
The more money you give to the bank the more money your gonna get back
Co-op banking
Mutual Savings Bank
Shareholders that make dividends
Mutual Savings Bank
Members are OWNERS
Credit Unions
A nonprofit institution owned and run by its members
Credit Unions
Preserves confidence in the financial system by supervising banks and insuring deposits in banks and thrift institutions
Federal Deposit Insurance Corporation-FDIC
Money sitting in your banking account is insured
FDIC
Step two
Manage your credit score
Invented the credit score
Fair Isaac Company-FICO
Impacts your ability to get a mortgage business loan, personal loan, car loan and JOB
FICO
Jobs or companies are gonna judge you on your score if
You don’t keep your credit score
Knows your FICO score
Credit reports
Credit reports to go to is
Trans Union
EQUIFAX
Experian
What is credit report to no go to?
Freecreditreport.com because offers protection that isn’t needed
Step 3
Get a credit card
If you don’t qualify for a credit card what do you get?
A secured credit card
Manage debt to
Credit limit ratio
Don’t max out
The available amount
NEVER_____a credit card
Close
Why don’t you not wanna not close a credit card?
Cause once you pay the credit off it it increases credit score
Step 4
Set upon E (emergency) fund
First investment is
Emergency fund
Savings goal for emergency fund should be
$16,000 for college kid
Step 5
Retirement
What is your second investment?
Retirement
Pension fund that is transportable from employer to employer
401K
Comes from my company for 35 years then will pay for the rest of my life is exp of
Pension
When you can double money by doing this up to a certain percent
Employer match
Invested in mutual funds
Pre-tax investing
Your employer can direct deposit money
Individual Retirement Accounts (IRAS)
Tax-deferred pension fund Wage earners supplement other retirement funds
Individual retirement account
Step 6
Wealth Management through continual diversification and timing
Your third investment
Non-retirement investments
Is equity
Stocks
How do you buy stock?
The broker will buy what is on your behalf
Are buying debt
Bonds
A whole bunch of investors who spread money over all different stocks and bonds
Mutual Funds
What’s so good about mutual funds?
It’s diversifying
Your diversifying and timing
A short term low risk financial securities purchased with the assets of investor owners
Money market mutual funds
More equites and less fixed income securities
Moderately portfolio
Less equities and more fixed income securities
Conservative portfolio
5 to 15 percent cash
Conservative portfolio
5 to 10 percent cash
Moderately aggressive portfolio
