Personal FInance Flashcards
Four steps to get yours savings going
1. ____ ____ ____ _____
2. Open a savings account
3. Figure out how to move money into savings account
4. Identify an accountability partner that checks on your savings goals
Set your SMART goal
Four steps to get yours savings going
1. Set your SMART goal
2. ____ ___ ____ _____
3. Figure out how to move money into savings account
4. Identify an accountability partner that checks on your savings goals
Open a savings account
Four steps to get your savings going
1. Set your SMART goal
2. Open a savings account
3. ____ ____ ___ ____ ____ ____ ____ ____ ____
4. Identify an accountability partner that checks on your savings goals
Figure out how to move money into savings account
Four steps to get yours savings going
1. Set your SMART goal
2. Open a savings account
3. Figure out how to move money into savings account
4. ______ ____ _____ ____ ____ ___ ___ ____ ____ _____
Identify an accountability partner that checks on your savings goals
- done over a long period of time
- most common purpose is for retirement
Investing
(ROI) Expectation that if you put money into savings or investments the money will grow over time without touching it
investment returns
Increase in value
capital gain
Amount a borrower pays to the lender for the use of money
Interest
Payments made by a company to a stockholder from excess profit
Dividends
PV-FV = ( ) + # of years = ( ) / FV = %
Rate of Return
Three factors influencing the future value of your investments
1. ________
2. Length of time
3. Rate of Return
Principal
Three factors influencing the future value of your investments
1. Principal
2. ____ ___ _____
3. Rate of Return
Length of time
Three factors influencing the future value of your investments
1. Principal
2. Length of time
3. ____ ____ ____
Rate of return
controllable with savings
Principal, Length of time, and rate of return
controllable with stock market
Principal and length of time
Einstein called this the 8th wonder of the world
Compounding
Four guidelines for borrowing:
1. ____ _____ ___ ____ ____ ___ _____
2. Use common economic sense
3. Have a guaranteed way to repay loan
4. Ensure unity with family
Consider whether you truly need to borrow
Four guidelines for borrowing:
1. Consider whether you truly need to borrow
2. ____ ____ _____ _____
3. Have a guaranteed way to repay loan
4. Ensure unity with family
Use common economic sense
Four guidelines for borrowing:
1. Consider whether you truly need to borrow
2. Use common economic sense
3. ____ ___ ____ ____ ___ ____ ____
4. Ensure unity with family
Have a guaranteed way to repay loan
Four guidelines for borrowing:
1. Consider whether you truly need to borrow
2. Use common economic sense
3. Have a guaranteed way to repay loan
4. ____ ____ ____ _____
Ensure unity with family
___ Percent of How credit scores are calculated is FICO
35%
___ Percent of how credit scores are calculated is amount owed
30%
___ Percent of how credit scores are calculated is new credit
10%
___ Percent of how credit scores are calculated is types of credit used
10%
___ Percent of how credit scores are calculated is length of credit history
15%
How to increase credit score
1. ____ ____ ____ ___ ___ ____ _______
2. Pay your bills on time every single time
3. Reduce the amount of debt you have
4. Increase income compared to debt
Check credit report and check for errors/fraud
How to increase credit score
1. Check credit report and check for errors/fraud
2. ____ _____ ____ ___ ____ ____ ____ ____
3. Reduce the amount of debt you have
4. Increase income compared to debt
Pay your bills on time every single time
How to increase credit score
1. Check credit report and check for errors/fraud
2. Pay your bills on time every single time
3. _____ ____ ____ ____ ____ ___ ____
4. Increase income compared to debt
Reduce the amount of debt you have
How to increase credit score
1. Check credit report and check for errors/fraud
2. Pay your bills on time every single time
3. Reduce the amount of debt you have
4. ____ ____ ____ ____ _____
Increase income compared to debt
The stock market is unpredictable and it is at risk of high and low swings in the short term
Market Volatility
Three ways to mitigate risk
1. _____ _____
2. Invest in the long-term
3. Play it safe - invest in low risk assets
Diversify portfolio
Three ways to mitigate risk
1. Diversify portfolio
2. ____ ___ ___ _______
3. Play it safe - invest in low risk assets
Invest in the long-term
Three ways to mitigate risk
1. Diversify portfolio
2. Invest in the long-term
3. ____ ____ ____ ____ ___ ___ ___ _____
Play it safe - invest in low risk assets
Common investment vehicles
1. ___ ___ ____
2. Money market account
3. Bonds
4. Stocks
5. Real-estate
6. Foreign and crypto currency
Long term savings
Common investment vehicles
1. Long term savings
2. ____ ____ ____
3. Bonds
4. Stocks
5. Real-estate
6. Foreign and crypto currency
Money market account
Common investment vehicles
1. Long term savings
2. Money market account
3. _______
4. Stocks
5. Real-estate
6. Foreign and crypto currency
Bonds
Common investment vehicles
1. Long term savings
2. Money market account
3. Bonds
4. ______
5. Real-estate
6. Foreign and crypto currency
Stocks
Common investment vehicles
1. Long term savings
2. Money market account
3. Bonds
4. Stocks
5. _________
6. Foreign and crypto currency
Real-estate
Common investment vehicles
1. Long term savings
2. Money market account
3. Bonds
4. Stocks
5. Real-estate
6. _____ ____ ______ ______
Foreign and crypto currency
Permission you have to borrow money
credit
Personal info, permission to pull credit report
credit application
Key means that the leading institution uses to determine your financial integrity
Credit report
The three main credit bureaus
equifax, trans union, experian
Risk of non-payment
raises interest rate
Five components of good credit:
1. ________
2. Capacity
3. Capital
4. Collateral
5. Conditions
Character
Five components of good credit:
1. Character
2. _______
3. Capital
4. Collateral
5. Conditions
Capacity
Five components of good credit:
1. Character
2. Capacity
3. _______
4. Collateral
5. Conditions
Capital
Five components of good credit:
1. Character
2. Capacity
3. Capital
4. ______
5. Conditions
Collateral
Five components of good credit:
1. Character
2. Capacity
3. Capital
4. Collateral
5. _______
Conditions
Five components of good credit:
character, capacity, capital, collateral, conditions
Three things the Bible does NOT say about borrowing:
1. ___ ___ ___ ____
2. Going into debt is wise
3. God will bail you out of debt
Don’t go into debt
Three things the Bible does NOT say about borrowing:
1. Don’t go into debt
2. ____ ____ _____ ___ _____
3. God will bail you out of debt
Going into debt is wise
Three things the Bible does NOT say about borrowing:
1. Don’t go into debt
2. Going into debt is wise
3. _____ ____ ____ ___ ___ ___ _____
God will bail you out of debt
Inherently unethical, prey on the poor, 400% APR
Payday loans
Paying off debt using the “Debt snowball”
1. ___ ___ ___ ____ ___ ___ ___ ___ ___ _____ __ ____
2. Put smallest one on top, largest on bottom of list
3. Pour as much as possible into top loan
Line up all debts you have in order of smallest to largest
Paying off debt using the “Debt snowball”
1. Line up all debts you have in order of smallest to largest
2. ____ ____ ____ ___ ___ ___ ____ ___ ___ ____
3. Pour as much as possible into top loan
Put smallest one on top, largest on bottom of list
Paying off debt using the “Debt snowball”
1. Line up all debts you have in order of smallest to largest
2. Put smallest one on top, largest on bottom of list
3. ____ ____ ____ ___ ___ ____ ____ _____
Pour as much as possible into top loan
