Final Exam Flashcards
What are the 7 baby steps?
- $1,000 in an emergency fund
- Pay off all debt except the house utilizing the debt snowball.
- Three to six months of expenses in savings.
- Invest 15% of your household income into Roth IRAs and pre-tax retirement plans.
- College funding for your kids.
- Pay off your home early.
- Build wealth and give.
Saving money is about?
Emotion and Contentment.
What are the three reasons you should save money?
- Emergency fund
- Purchases
- Wealth Building
Compound Interest:
Paid on interest previously earned. It can be awarded daily, monthly, quarterly, semiannually, or annually on both principal and previously credited interest.
What’s another term for budget?
Written cash flow plan.
What is the easiest, most powerful plan for a budget?
A zero-based plan using the envelope system.
Paradigm:
Your belief system; the way you see or perceive things.
Lease:
A long-term rental agreement; a form of secured long-term debt.
Tax Deduction:
Expense that a taxpayer is allowed to deduct from taxable income; examples include money paid as home mortgage interest and charitable donations.
Depreciation:
A decline in the value of property; the opposite of appreciation.
What will a $28,000 car be worth in 4 years?
$8,400
Adjustable Rate Mortgage (ARM):
Home loan secured by a deed of trust or mortgage in which the interest rate will change periodically.
Balloon Mortgage:
Home loan in which the sum of the monthly payments is insufficient to repay the entire loan; as a result, a final payment comes due, which is a lump sum of the remaining principal balance.
Foreclosure:
The holder of a mortgage sells the property of a homeowner who has not made payments on time.
Debit Card:
A card that often bears the seal of major credit card company, issued by a bank and used to make purchases; unlike a credit card, the money comes directly out of a checking account; also called a check card.
Grace Period:
Time period during which a borrower can pay the full balance of credit due with no finance charges.
Home Equity Loan (HEL):
Credit line offered by mortgage lenders that allows a homeowner to borrow money against the equity in their home.
Debt Consolidation:
Act of combining all debts into one monthly payment, typically extending the terms and the length of time required to repay the debt.
What are the 5 steps out of debt?
- Quit borrowing more money
- You must save money
- Sell something
- Part-time job or overtime (temporarily)
- Use the debt snowball.
What is never enough compensation for doing a job?
Money
DISC Personality Profile:
A behavior profile test that yields insights into how you process decisions and what your natural tendencies may be. (Dominant, Influencing, Steady/Stable, Compliant)
Dominant person:
A hard-charging driver that is task-oriented and first looks to problems.
Influencing person:
People oriented, fun, outgoing and generally concerned about pleasing people, so they first look to people.
Steady/Stable person:
Is amiable, loyal, does not like conflict, and is concerned about pace.