Midterm Flashcards
The best predictor of future behavior is the….
past
The 5 steps to financial planning
- Est financial goals 2. develop strategies 3. develop tactical steps (measurable) to to achieve strategies 4. utilize proper tools to measure and monitor progress 5. Assess and reassess
total dollar value of all goods and services produced in US
GDP gross domestic product
calculated on a monthly basis, starts at 100, if it goes up: indication of inflation, down: deflation
CPI, consumer prices index
what is the balance sheet? What does it determine?
asset & liabilities; net worth = assets - liabilities
determines your net income by subtracting your expenses (specific ie: taxes, transportation, food, utilities, pets,clothing, insurance, rent, etc) from your income (total, including stock dividends, etc) >covers a span of time (2 months or something)
income statement
when is the budget usually done?
October/ November
current assets/ current liabilities is what ratio? Should it be higher or lower?
current ratio, >1 higher= better
savings/gross income (yearly) >ratio that determines how much your saving, relative to gross income earning
savings ratio; higher is better 4.3% average
total liability/ total assets > ratio that determines percentage of assets you have against all liabilities. 100% is common, lower is better
debt/ liability ratio
ratio determined from monthly amounts of debt/ gross income
debt ratio
the top 1% of americans pay …..% of the taxes; only …% of people pay them
37%; 50%
the tax system we currently have which entails paying according to your income
progressive
type of tax system where everyone pays the same
flat tax
the legal way to keep your taxes lowered is
tax minimization
the 70k pgs on taxes is called the…
IRC internal revenue code
the 4 quadrants for doing taxes are? Review notes!
- net income (to determine gross income) 2. adjustments (to get AGI) 3. apply exemptions deductions and credits to get your taxable income 4. tax refund
specifically, what is a good way to move someone to the next tax bracket down ?
credits : child care, EIC, alternative energy, foreign tax credit (losses you took from another country)
what is exempt or non taxable?
military pay, life insurance proceeds, child support, municipal bond
constructively having the benefit of something (like a company car) , so you still pay taxes
construed value
a transaction with a capital asset will result in 1 of 4 options,which are……..
ST gain or loss and long term gain or loss
short term capital asset transactions will result in …..% tax
39.6% , the highest possible
long term capital asset results in a ….% tax
20
you can claim up to ……. in quadrant 1 for capital gains losses. If the amount is more than this you can claim………. a year until the total has been claimed
3000, 3000
states make most of their money from……and cities make most of their money from………
sales tax, property tax
profit/investment
ROR rate of return formula
a few tax strategies…….
- start a home-based biz for deductions 2. take advantage of 401k 3. shift income-dividends,etc hold till jan 4. shift expenses (medical, etc) to a year where they are more needed 5.utilize real estate
a few better options for your money opposed to a savings account at .1% yield would be………
treasury bonds & governments bonds (the only secured),commercial paper (GE) & MMDA
walls streets tips stands for……………, and its purpose is to………
treasury inflation protection service, protect consumers and corporations from inflation by insuring their ror
1% is……….base points
100
to avoid a negative impact on your credit score when closing a credit card account……………
say, put on the record “closed at cardholders request “
what is the role of real estate in financial planning?
- tax shelter (write-off interest and property tax) 2. shelter 3. inflation hedge (offset between deflation and inflation) 4. investment
real estate increases at roughly …%
3
when dealing with foreclosure your options include……
a workout, or restructuring of the original terms (ie: change interest, length,
oreo & oao stand for……..
other real estate owned & other assets owned
…….is used to calculate tax; to determine you multiply by the mill rate (per ……..)
assessment; 1000
to the buyer it’s the amount you’ve paid on the loan, to the bank it’s what you haven’t.
LTV loan to value
factors affecting the value of a home include:
educational system, crime, location, proximity to convenience/restaurants/ entertainment/ public transportation, etc
the value of the land is usually ……..% of the property
20
the safe # for radon is ……..parts per million
4
the write-up of the condos meetings where special fees are determined is called the……….
meeting minutes
before buying any condo you should always check the ………
condo documents and financial statements
if the condo is abusing the use of fees a ……….can be filed
93A
the 5 steps to the real estate process are:
- offer 2. accept/reject/ counter 3. documents/funding 4. purchase and sales agreement 5.inspection/ close
staging has a ……:…… ratio of benefit
20:1
with this type of property everyone owns a part of each apartment and each has a say over each one as well. Benefit is that they can be cheaper
COOP
When determining eligibility for a loan the bank looks at what ?
FICO and pass of the PITI & PITI+other debt tests
the 2 types of letters you can get from the bank to show a sellers agent you are able to acquire funding are called:
pre-qualified: able to prove your eligible, lasts 30 days
pre-approval: able to prove eligible AND bank guaranteed funding, lasts 30-60 days
What are the 2 tests the bank uses to see if you eligible for a loan?
PITI=principal+interest+taxes+insurance/ gross monthly income, are less than or equal to 28%
PITI + other debt/gross monthly income = (same ^ + student loans, car loans, credit payments, etc) less than or equal to 36%
