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Personal Finance > Midterm > Flashcards

Midterm Flashcards

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0
Q

The best predictor of future behavior is the….

A

past

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1
Q

The 5 steps to financial planning

A
  1. 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
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2
Q

total dollar value of all goods and services produced in US

A

GDP gross domestic product

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3
Q

calculated on a monthly basis, starts at 100, if it goes up: indication of inflation, down: deflation

A

CPI, consumer prices index

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4
Q

what is the balance sheet? What does it determine?

A

asset & liabilities; net worth = assets - liabilities

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5
Q

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)

A

income statement

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6
Q

when is the budget usually done?

A

October/ November

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7
Q

current assets/ current liabilities is what ratio? Should it be higher or lower?

A

current ratio, >1 higher= better

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8
Q

savings/gross income (yearly) >ratio that determines how much your saving, relative to gross income earning

A

savings ratio; higher is better 4.3% average

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9
Q

total liability/ total assets > ratio that determines percentage of assets you have against all liabilities. 100% is common, lower is better

A

debt/ liability ratio

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10
Q

ratio determined from monthly amounts of debt/ gross income

A

debt ratio

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11
Q

the top 1% of americans pay …..% of the taxes; only …% of people pay them

A

37%; 50%

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12
Q

the tax system we currently have which entails paying according to your income

A

progressive

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13
Q

type of tax system where everyone pays the same

A

flat tax

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14
Q

the legal way to keep your taxes lowered is

A

tax minimization

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15
Q

the 70k pgs on taxes is called the…

A

IRC internal revenue code

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16
Q

the 4 quadrants for doing taxes are? Review notes!

A
  1. 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
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17
Q

specifically, what is a good way to move someone to the next tax bracket down ?

A

credits : child care, EIC, alternative energy, foreign tax credit (losses you took from another country)

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18
Q

what is exempt or non taxable?

A

military pay, life insurance proceeds, child support, municipal bond

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19
Q

constructively having the benefit of something (like a company car) , so you still pay taxes

A

construed value

20
Q

a transaction with a capital asset will result in 1 of 4 options,which are……..

A

ST gain or loss and long term gain or loss

21
Q

short term capital asset transactions will result in …..% tax

A

39.6% , the highest possible

22
Q

long term capital asset results in a ….% tax

A

20

23
Q

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

A

3000, 3000

24
Q

states make most of their money from……and cities make most of their money from………

A

sales tax, property tax

25
Q

profit/investment

A

ROR rate of return formula

26
Q

a few tax strategies…….

A
  1. 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
27
Q

a few better options for your money opposed to a savings account at .1% yield would be………

A

treasury bonds & governments bonds (the only secured),commercial paper (GE) & MMDA

28
Q

walls streets tips stands for……………, and its purpose is to………

A

treasury inflation protection service, protect consumers and corporations from inflation by insuring their ror

29
Q

1% is……….base points

A

100

30
Q

to avoid a negative impact on your credit score when closing a credit card account……………

A

say, put on the record “closed at cardholders request “

31
Q

what is the role of real estate in financial planning?

A
  1. tax shelter (write-off interest and property tax) 2. shelter 3. inflation hedge (offset between deflation and inflation) 4. investment
32
Q

real estate increases at roughly …%

A

3

33
Q

when dealing with foreclosure your options include……

A

a workout, or restructuring of the original terms (ie: change interest, length,

34
Q

oreo & oao stand for……..

A

other real estate owned & other assets owned

35
Q

…….is used to calculate tax; to determine you multiply by the mill rate (per ……..)

A

assessment; 1000

36
Q

to the buyer it’s the amount you’ve paid on the loan, to the bank it’s what you haven’t.

A

LTV loan to value

37
Q

factors affecting the value of a home include:

A

educational system, crime, location, proximity to convenience/restaurants/ entertainment/ public transportation, etc

38
Q

the value of the land is usually ……..% of the property

A

20

39
Q

the safe # for radon is ……..parts per million

A

4

40
Q

the write-up of the condos meetings where special fees are determined is called the……….

A

meeting minutes

41
Q

before buying any condo you should always check the ………

A

condo documents and financial statements

42
Q

if the condo is abusing the use of fees a ……….can be filed

A

93A

43
Q

the 5 steps to the real estate process are:

A
  1. offer 2. accept/reject/ counter 3. documents/funding 4. purchase and sales agreement 5.inspection/ close
44
Q

staging has a ……:…… ratio of benefit

A

20:1

45
Q

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

A

COOP

46
Q

When determining eligibility for a loan the bank looks at what ?

A

FICO and pass of the PITI & PITI+other debt tests

47
Q

the 2 types of letters you can get from the bank to show a sellers agent you are able to acquire funding are called:

A

pre-qualified: able to prove your eligible, lasts 30 days

pre-approval: able to prove eligible AND bank guaranteed funding, lasts 30-60 days

48
Q

What are the 2 tests the bank uses to see if you eligible for a loan?

A

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%

Personal Finance (2 decks)

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