Ramsey- Of Mice And Mutual Funds Flashcards
Under what two circumstances should you NEVER invest?
- for tax savings
- under borrowed money
What does it mean to diversify your stocks?
Spread them around between companies (don’t put all your eggs in one basket)
When the _______ of an investment goes up, so does the ______
Risk, return
What does liquidity mean?
Availability
As there is more liquidity, there is less ________
Return
What is a CD?
A certificate of deposit against the bank
What kind of investing carries a high degree of risk?
Single stock investing
When you buy stocks, what are you really buying?
A piece of ownership in the company
As a stockholder, your return comes as the company increases in _______
Value
What is it called when a company takes money out to pay you (their stockholder) every month?
Dividend
What are debt instruments by which the company owes you money?
Bonds
Your return comes as the value of _______ increase
Funds
What does it mean to have a mutual fund?
Investors pool their money to invest
Who manages the pool or fund?
Professional portfolio managers
Mutual funds are good ________ term investments
Long
Having real estate allows you to lease _________ ___________ investment
Liquid consumer
What should you have before using real estate as an investment?
A LOT of cash
Give two examples of horrible investments
- gold
- viaticals
What is baby step 4?
Invest 15% of your household income into the Roth IRA and pre-tax retirement plans
Always save long term with _______ ____________ dollars
Tax favored
The Roth IRA is an ________ tax IRA that grows tax ______
After, free
Why should you use the Roth IRA?
It gives you more choices
You should always do what when you leave a company?
Roll all retirement plans over to an IRA
What’s the KISS rule of investing?
Keep It Simple Stupid
