Combo with "Financial Literacy- Chapter 1 and 2" and 3 others

Steps to performing a financial check-up are?

balance budget pay off interest start emergency fund employee sponsored retirement program

What are the 3 types of personal financial statements?

balance sheet.cash flow, personal budget

Income

budget fixed expenses

What types of records would be stored on a home computer?

budget, checks

Why is Real Estate, especially Raw Land, considered a "speculative" Investment?

buying property and selling it at a profit

How does this personal financial statements help in money management? Cash Flow Statement:

cash received and spent

SAVINGS are good for giving you

cash when you need it.

Life has__________ and choices have ______________

choices and consequences opportunities and costs

Comprehensive insurance

covers your car for reasons other than a collision, such as theft, fire, vandalism

What are the various types of liabilities?

current long term

What is at the heart of financial planning?

daily spending and saving

"Doing Nothing" can be a

dangerous alternative!!!

Define net worth.

difference between liabilities and net worth

What is the difference between disposable income and discretionary income?

disposable - what you can spend discretionary -what you want to spend

Taxes collected on the state and local levels provide the following benefits to the state and local population:

education state welfare streets, roads, highways safety recreation

What types of records go in a home file?

employment, money management,, tax record

What must you do before you Invest?

establish investment goals

What are the 4 types of required deductions?

federal state local social security

What are the 2 types of cash outflows?

fixed variable

What is the difference between a fixed and variable expense?

fixed - does not change variable- changes

What is a bull market?

good market a period if increased stock trading and rising stock prices

The IRS system is a ___________ system or a progressive system.

graduated

What is money management?

helps manage economic resources

How does this personal financial statements help in money management? Budget:

helps you achieve goals

Prepare a list of the various taxes you pay in or society

income sales social security property

How is a net cash flow determined?

income - outflow = cash flow

Yield Percent

income return on an investment

Earning taxes are

income taxes and Social Security taxes

How can net worth be increased?

increase saving, reduce spending

How long should you keep birth certificates, Social Security cards, etc?

indefinitely

How long should you keep records on real estate?

indefinitely

7.What is Inflation?

inflation. You have to make more money just to keep up with the rising cost of living

When gas goes up from $2.30 to $4.00 a gallon we say that is

inflation. You have to make more money just to keep up with the rising cost of living

Life Insurance

insurance paid to named beneficiaries when the insured person dies Especially important for parents raising young children for the cost of their expenses - school, medical, college, health, weddings

Liability insurance

insurance that provides protection from claims arising from injuries or damage to other people or property

Compound Interest

interest earned on both the principal amount and any interest already earned

Define Compound Interest

interest earned on both the principal amount and any interest already earned

Define Simple interest

interest paid on the principal alone

Simple interest

interest paid on the principal alone

Saving and investing are two unique concepts, and it's important to understand the difference between them and the need for each. Saving, by definition, involves

involves the protection and preservation of money from loss. Investing, on the other hand, means to make a long-term commitment of putting money away and letting it grow. This involves risk, such as the occasional and inevitable downturns in the market; however, over the long-term (five years or more) those dips are expected to smooth out into an overall upward growth pattern.

What types of records go in a safety deposit box?

items that can not be replaced

The IRS has the power to

levy taxes.

What are the various types of assets?

liquid assets,real estate,investments, personal possitions

chapter 7 bankruptcy

liquidation - straight bankruptcy No income needed most filed are this type. Can keep some assets.

When you say "List current debt" what do you mean?

list the people you have to pay back, for instance, Paying back school debt Car loan (what You owe the bank for your car) House loan (what you owe the bank for your house)

When you say "list current assets" what do you mean?

list the things you own like: a house a car the amount of money you have in your checking account

What 3 components are listed on a personal balance sheet?

listing items of value

Impulse buying

making purchases based on emotion rather than on reason

sticker price

manufacturer's suggested retail price listed on a sticker in a new car's window

Secondary Market

market for reselling financial assets

Primary Market

market in which only the original issuer can sell or repurchase a financial asset

Stock Exchange

market in which shares are issued and traded

Chapter 13 Investing Fundamentals will primarily look to options of growing your money over time and applying the time value of money and compounding interest concepts which require a more long approach. Note that often times people use the terms savings and investing to

mean the same thing.

List and explain the 4 types of budgets.

mental- in you head physical - expense written- spread sheet computerized- software

What is a liquid asset?

money

What is an emergency fund?

money to cover unexpected expenses

How should your investing strategy change as you get older?

more security because you don't have as long to work and make money for retirement

What 3 things are spending decisions based upon?

needs goals situations

Define insolvency.

negative net worth

A balance sheet is also called a ____ __________ _________________.

net worth statement

You need money in a savings account if you are working toward buying a

new car

Do only rich people invest?

no

6)Other Investment Alternatives:

options Commodities Precious Metals like gold or silver Collectibles

Market Order

order that an investor makes through a broker

A cash flow statement is also called a ___________________ __________________ _____ ___________________

personal income and expenditure statement

Safety in ANY investment means what?

predictable outcome

7. What is the major difference between "preferred" and "common" stocks?

preferred receive cash first. Preferred shares are safer than common stock because the dividends are more secure.

What does the term "asset allocation" mean, and how is it a safer way to invest?

process of placing your assets among several types of investments

If you're looking to make a down payment on a new car in two years, or you will be entering college in three, you simply can't make a long-term investment commitment to handle those expenses. Such short-term needs are much better addressed with the concept of saving and preserving your capital. Whereas, investing attempts to make money grow by allowing it to compound with the assumption a certain risk level, saving acts to

protect your investment capital so that it's both intact and easily turned into cash when you need it.

When someone says "Pay Yourself First" that means to

put money in a savings account. SAVE Your MONEY

List some ways to save regularly.

putting it in a saving account automate it

Property taxes are

real estate property tax and personal property tax

Technical Skills General Skills are traits adaptable to most work situations. Some can be acquired at school, while others require experience at work or organizational settings (get involved with clubs, sports teams, volunteer work etc).

refers to specialized career training for a specific profession. Such as: - Informational Technology - Engineering - Accounting - Health Care - Law Enforcement - Law

What is the purpose of personal financial statements?

report financial position

6.What are the factors that influence the choice of Investments?

safety and risk risk return tradeoff investment growth

Purchase taxes are:

sales tax and excise tax

Ultimately you will use a combination of

savings and investing techniques over the course of your lifetime.

Common Stock

security that represents ownership in a corporation

What are the steps in the budgeting process?

set goals estimate income emergency fund

The average person changes jobs more than ________ times over a lifetime

seven times over a lifetime

stocks

shares of ownership in a company

What are some opportunity costs associated with money management?

spending reduces saving

In order to achieve the best possible results, it's crucial that you match your saving or investing goals with the proper financial tools. For instance, dangerous to an ill-prepared portfolio because stocks - and the stock market in general - have historically experienced short-term drops in value.

stocks and stock mutual funds are generally considered to be excellent LONG TERM investment options. For the majority of the last century, stocks have produced some of the best returns when compared to virtually every other investment available. But over a short time frame (under five years), they can be quite volatile and dangerous to an ill-prepared portfolio because stocks -

What are the 3 components of money management?

store records , financial statement , have a plan

Net pay is also called _______ ________ _____ or ______________ ______________.

take home pay disposable income

The IRS sets

tax rates and tax brackets

What are the benefits of having an organized system for financial records?

tax reports, investment desires

Stock split

the division of a single share of stock into more than one share 2 for 1 _____ allows a shareholder to double the number of shares but worth one half of their previous value. 2-for-1 ______on 40 shares that is worth $80 would result in 80 shares at $40 at the time

Inflation causes what

the increase of prices. When gas goes up from $2.30 to $4.00 a gallon, we say that is inflation. You need to make more money just to keep up with the rising cost of living

How to calculate purchase price

the price paid to gain permanent ownership of a factor of product

Gross pay

the total amount of an employee's earnings BEFORE deductions are taken out

Consumer credit

the use of credit for personal needs, except a home mortgage, by individuals and families

The key to investing is to

to MINIMIZE THE RISK and to MAXIMIZE THE FINANCIAL REWARD. For this reason, it is important to understand the many ways to invest money.

What are the 3 components of a cash flow statement?

total cash cash over flow surplus

What is "pay yourself first"?

unexpected expenses

What are some sources of income?

wages surplus gifts

What are the characteristics of a successful budget?

well planed realistic flexible communication

Define liabilities.

what you owe

Define assets.

what you own

What is a personal balance sheet?

where you put how much you spend

Make sure your goals are

your own and are specific to your situation

Two Year Vocational Degree:

$1.8 million

What is a tax deduction

$100 deduction

Bachelor's Degree:

$2.5 million

Master's Degree

$2.8 million

Professional or doctorate degree

$3.8 million

What is NOT taxable?

* Accident and health insurance proceeds * interest on state and local bonds * Military allowances * Welfare and public assistance benefits * Housing allowance for ministers * Life insurance proceeds * Veteran's benefits * Worker's compensation benefits

The IRS (Internal Revenue Service) does the following:

* Collect taxes and enforce tax laws * Congress * Power to levy taxes * Tax Rates/Tax Brackets *Graduated system - progressive * Tax Evasion * Audits

Debt problems warning signs

* paying Only the minimum balance each month * increasing the total balance due each month * missing or alternating payments or paying late intentionally using overdraft protection or taking frequent cash advances *Using savings to pay routine buills such as food *getting second or third payment notices *not talking to your partner about money or talking only about money *depending on overtime to meet routine expenses *using up your savings *borrowing money to pay old debts *not knowing how much you owe *Going over your credit limit on credit cards *Having little or no savings for the unexpected *Being denied credit due to a credit report *getting a credit card revoked by the issuer *putting off medical or dental visits because you can't afford them now

Dollar - Cost average

*Average cost per share = amount invested/number of shares purchased *Used so investors don't have to worry about timing purchases *Investor makes profit when selling price per share is higher than average cost per share

How do you find out about a company

*Gather information to evaluate a potential investment in a stock *Learn what the info you gather means *Know there are periods where stocks decline in value *Allow investments to work for you over the long term>

4. How can consumers make money off "Common Stock"?

*Income from dividends in the form of cash or additional stock, * dollar appreciation of stock value, * possible increased value from stock splits

2. Why do Corporations issue "Common Stock"?

*To raise money for startup costs and help pay for expansion. *They don't have to repay the money *Dividends are not mandatory.

Direst Investment

*buying stock directly *avoid fees *get shares at lower prices *available to existing stockholders who can buy *additional shares at fixed prices at or below market

stock split

*increasing outstanding shares lowers selling price in direct proportion *(1000 shares at $60 is 2000 at $30) *encourages investors to buy more *when buy more at lower price, share price rises and if stock is held before split, price increase makes stock worth more

Buy and Hold - Long term investors purchase stocks

*overall trend of long term stock s is moderately up *can ride out down times *when selling later, likely that stock has gained value *getting paid dividends so earning income while holding

Reinvesting Dividends

*use previously earned dividends *avoid fees

How to calculate interest

- Interest Earned = *(PRINCIPAL × RATE × TIME (in years))*

What is an opportunity cost?

- What you give up when you make a choice The cost or trade-off of a decision cannot always be measured in dollars. Sometimes the cost is your time

What 2 things are financial goals influenced by?

- the time frame in which you want to achieve your goals - the financial need that drives your goals

The best way to think about this is that most people have both a

-savings account (short-term goals & emergency fund) -investment account (long-term goals & retirement)

Define a short term goal

1 year or less

Directions: Based on the information given, compute net pay. Kim Li regular gets paid a monthly salary of $1500 plus she gets 10 hours overtime at $18.75 an hour. She is married and claims 0 allowances making federal tax owed $164 and state tax owed $89. Calculate her net pay.

1,528.25

Define an intermediate goal

1-5 years

Steps for Completing your Federal Income Tax Return

1. Filing status and exemptions 2. Income 3. Adjustments to income 4. Tax computation 5. Tax credits 6. Other taxes (such as self-employment) 7. Payments (total withholdings, estimated payments) 8. Determine if you are due a refund or owe money to the government 9. Sign your return and send in with a check if you must pay MUST SEND IN BY APRIL 15th

List and describe the 4 Investment Theories that influence Investment Decisions:

1. Financial strength of the company 2. Type of Industry 3. New Product Development 4. Economic Growth

List and describe the 3 types of Stock Transactions listed in your notes:

1. Market Order 2. Limit Order 3. Step Order

Long Term Techniques

1. buy and hold 2. stock split 3. dollar cost average

Four Types of Taxes

1. purchases (Sales tax and excise tax) 2. Property ( Real estate property tax and Personal property tax) 3. Wealth (Federal estate tax, state inheritance tax) 4. Earning (Income, Social Security Taxes)

Overtime is calculated at ____ the rate of pay for any hours worked over ____ in a ___ week time period.

1.5 (one and one-half times regular pay) 40 hours (regular number of hours worked in a week) 1 week time period

You can amend (correct) your tax return by using what form?

1040X

Directions: Based on the information given, compute net pay. Martin Etter gets paid a monthly salary of $2780. He is married and claims 4 allowances making his federal tax owed $65 and state tax owed $80. Calculate his net pay

2635.00

Directions: Based on the information given, compute net pay. Joan Valencio gets paid $8.60 an hour. She decides to work 4 hours overtime for the week. She is single and claims 0 allowances, making her federal tax owed $44 and state tax owed $23. Calculate her net pay.

294.38

Approximately one-third (1/3) of each dollar you earn goes to pay taxes. That is how much of every dollar?

33 percent or 33 cents out of every 100 cents (or 33 cents out of every dollar)

Figure the MONTHLY PAY if the Annual pay is $36,000. (That is the yearly pay) Calculate monthly pay. $36,000 / 12

36,000 divided by 12 (months in the year) 3,000.00

Directions: Based on the information given in the following problems, compute the gross pay. Hours worked: 45 Regular rate of pay: $7.70 per hour

40 x 7.70 5 hours overtime (The overtime is 7.70 plus half of 7.70 which is 3.85 per hour) 7.70 + 3.85 = 11.55 40 x 7.70 = 308.00 That is the regular pay 5 x 11.55 = 57.75 That is the overtime pay Now add the regular and the overtime: 308.00 + 57.75 = 365.75 365.75

Directions: Based on the information given in the following problems, compute the gross pay. USE THE CALCULATOR Regular hours worked: 40 Regular rate of pay: $8.00 per hour

40 x 8 = 320.00

Directions: Based on the information given in the following problems, compute the gross pay. figure it out with a calculator Hours worked: 48 Regular rate of pay: $8.00 per hour

40 x 8.00 = 320.00 Overtime pay 8.00 + 4.00 = 12.00 per hour 8 hours x 12 per hour = 96 #20.00 + 96.00 = 416.00

Directions: Based on the information given, compute net pay. Margaret Bielke gets paid an annual salary of $40,700. She gets paid every month. She is married and claiming 2 allowances, making her federal tax owed $240 and state tax owed $176. Calculate her net pay.

40,284.00

Define a long term goal

5 + years - long term goals should be planned in coordination with short term goals and intermediate goals.

How long should you keep tax return forms?

5 years

Directions: Based on the information given in the following problems, compute the gross pay. USE THE CALCULATOR Regular hours worked: 40 Regular rate of pay: $7.70 per hour

7.70 x 40 = 308.00

Regular salary: $984 per month Overtime rate: $15.39 per hour (14 hours overtime to be paid)

984 per month plus 15.39 *14 hours overtime 984 + 215.46 = 1199.46 1199.46

W-4

A federal tax form filled out by an employee to indicate the amount that should be withheld from his/her paycheck for taxes.

balance sheet

A financial statement that reports assets, liabilities, and owner's equity on a specific date.

salary

A fixed amount of money paid to an employee for each pay period.

What are some opportunity costs associated with career choices?

A great job opportunity in your field might mean you have to move far from family

What is a Bond? When is the Principal paid and with what tagged on?

A loan to a corporation It is paid

Bond

A loan to a corporation or a municipality, like a city. A financial security that represents a promise to repay a fixed amount of funds

cash flow statement

A measure of the money you receive and the money you spent

budget

A plan for making and spending money

Ticker Tape

A thin strip of paper that reported the latest stock market information by telegraph before the invention of the computer. Device that shows stock symbols and numbers

What is Investment Liquidity?

Ability to buy or sell an investment quickly

What is Gross Income

All taxable income received -- Wages, salaries, tips, interest, dividends, unemployment, alimony, workers' compensation, etc. --Gambling winnings, bartering, pensions, annuities, social security, self-employment income, rental income, royalties, etc.

Purpose of a will

Allows individuals to distribute their property any way they choose.

4)What are the Risks to Investing?

Although investing can make money with money, the downside of investing is that there is a risk of losing your money.

AMEX

American Express

Objective 1: Describe the activities associated with career planning and advancement

Career selection requires planning...begin planning in HS Utilize Naviance Take advantage of different electives at the HS Talk to professionals and begin researching options

What are the ways that I can invest my money?

Cash, like a Savings account at a bank where you make interest on your money Stocks Bonds Real Estate Mutual Funds

Bankruptcy types

Chapter 7 bankruptcy - Chapter 13 bankruptcy

5 c's of creditworthiness

Character Capacity Capital Collateral Conditions

Preferred Stock

Class of ownership that has a higher claim on its assets

List some of the "riskier" types of Investment you could buy into.

Corporate Bonds Municipal Bonds Preferred

How do you complete Step 2 of the Financial Planning Process?Step 2: DEVELOP YOUR FINANCIAL GOALS

Determine the source of your feelings about money the effects of economy on your goals and priorities Make sure your goals are your own and are specific to your situation

How do you complete Step 1 of the Financial Planning Process? Step 1: DETERMINE YOUR CURRENT FINANCIAL SITUATION

Determine current financial situation regarding income, savings, living expenses, and debts List current asset and debt balances and amount spent for various items Match financial goals to current income and potential earning power

List the 6 steps of the Financial Planning Process.

Determine your current financial situation. Develop your financial goals. Identify alternative courses of action. Evaluate your alternatives. Create and implement your financial action plan. Review and revise your plan.

How do you complete Step 5 of the Financial Planning Process?

Develop an action plan that identifies ways to achieve financial goals Possible action plans can be increasing savings, reducing spending, or making provisions for taxes To implement action plans you may need assistance from others

Net Change

Difference between the closing price on the day's trading and the previous day's closing price

Miscellaneous Techniques:

Direct Investment Reinvesting Dividends

Dividends

Distribution of a company's earnings

How to calculate dividends

Dividends = (Old RE + Net Income) - New RE

Consumer Credit Counseling services

Entities that are non-profit and help getting debt under control?

Wealth taxes are

Federal estate taxes and state inheritance taxes

WHAT AFFECTS FINANCIAL SUCCESS...

Field of Study Job Market Level of formal training More education increases your potential earning power and reduces your chances of unemployment JUST HOW MUCH...

Closing Price/Last Trade Amount

Final price when a security is traded

How do you calculate Taxable Income

First Calculate Gross Income (all income received) Then Subtract out any allowed adjustments Then Take out any deductions and exemptions (such as exemptions for dependent children) That is the amount of income used to determine the tax.

Initial Public Offering

First sale of stock by a private company

Investing is a way to make money with your money. How can you do this as a teenager.

First, you have to earn money. As a teenager, you get money from allowance, gifts, services, selling goods, or working at a job. Try to save some, if not all of this money. The next step is to make your money grow through investing. The chart below illustrates this process.

How to calculate Break Even

Fixed cost / Contribution (Selling Price per unit - Variable cost per unit)

Service Industries Expected to Have the Greatest Employment Potential

Information technology Health care Business services Social services Sales and Retailing Hospitality and food services Management and human resources Education Financial services

Health Insurance

Insurance to help with the payments of medical expensses

IRS stands for

Internal Revenue Service

A good cover letter for applying for a job will include

Introductory paragraph Get reader's attention Overview your qualifications Development paragraph Specific qualifications Refer to details on resume Experiences and training Concluding paragraph Ask for interview Include how to contact you Summarize how you can help the company

Dollar cost average

Investing equal amounts of money at regular intervals.

6. What is "Preferred Stock"?

Investors in preferred stock receive dividends before common stock (Very rare - less than 1%)

What is Mutual Fund?

Investors' money is pooled together

During what month of the year are W-2 's distributed to employees?

January (They have to be mailed by January 31)

What is the difference between a job and a career?

Job An employment position obtained mainly to earn money, without regard for interests or o pportunities for advancement CAREER A commitment to a profession that requires continued training and offers a clear path for occupational growth

Stocks and mutual funds are good

LONG TERM INVESTMENTS

Buy and Hold

Long term investors purchase stocks

Examples of credit

Master Card Credit Card Honda Car loan Home Mortgage loan

3. What is a dividend? Are they mandatory?

Money that is returned. No, they are not mandatory.

Corporate Earnings

Most important aspect of stock evaluation because that tells the shareholders what they can expect their stock share prices to do, either increase or decrease.

What do Federal taxes provide:

National parks, military, postal service Protection Education Safety

How do you complete Step 6 of the Financial Planning Process?

Need to be assessed regularly Complete review should be done at least once/year

NYSE

New York Stock Exchange

Closed end credit

One-time loans for a specific purpose that you pay back in a specified period of time and in payments of equal amounts Example - Mortgage, automobile and installment loans for furniture, appliances and electronics

Credit is a ___________________ not a ___________________ _____

PRIVILEGE NOT A GIVEN RIGHT

Buy and Hold

Passive stock strategy when an investor buys stocks and holds them (this is the best way....invest and walk away until such time as you are ready to sell) Makes more money, less stress

Playing the stock market

Persuaded into get-rich-quick thought... People bought on the margin, but had to pay back high interest

How do you complete Step 3 of the Financial Planning Process?Step 3: IDENTIFY ALTERNATIVE COURSES OF ACTION

Possible courses of action can be: Continue the same or take a new course of action Expand or change the current situation "Do nothing" can be a dangerous alternative

What is the difference between a "primary" & a "secondary" market?

Primary - Investors purchase financial securities through a bank Secondary - a market for existing financial securities

How are stocks bought and sold?

Primary, Market, Investment bank, Secondary Market

How to calculate earnings over a period of time/return

Profit per Day per Share

Insurance - Purpose

Protect your family against financial hardship

Renter's insurance protect

Protects personal property

Estate planning

Provides a clear plan for what should happen upon the death of an individual

What is a tax credit?

Reduce by $100

Sell short

Sale of a security not owned by the seller

List some of the "safer" types of Investments you could buy into with minimal loss.

Savings Account and CD's US Savings Bonds US Treasury Bonds

Insurance Premiums - how are they determined

Series of numbers 100/300/50 First set - 1,000 Second set - Total for all Third Set - property damage

What are the 3 timings of goals?

Short-term (1 year or less) Intermediate (1-5 years) long-term goals (5 + years) Long term goals should be planned in coordination with short-term and intermediate goals

Financial goals can be separated into two types:

Short-term goals - Things that you need or want now or within the year, such as a cell-phone, a computer, or a video game. Generally, it takes less money to reach these short-term goals. Long-term goals - Things that you need or want in a few years or more, for example, going to college, buying a house, and even starting a business. Generally, these goals are expensive and require some planning

What are the different filing status options?

Single Married Filing Jointly or Married filing separately Head of Househould - Married or single _ Qualifications Qualifying Widower

Form 1040EZ

Single or Married with no dependents claimed Taxable income of 50,000 or less Less than $1,500 of taxable interest no itemized deductions

Using the 20/10 Rule So if you make $200 a MONTH (net), WHAT IS THE MOST YOU CAN PAY IN PAYMENTS A MONTH?

So if you make $200 a MONTH (net) 200 x .10 (or 10%) = 20 You should not have payments more than $20 a month that you have to make

Using the 20/10 Rule So if you make 10,000 annually (net), how much can you spend a year on consumer credit payments?

So if you make 10,000 annually (net) 10,000 x .20 (20%) = $200 You should not be making a total of more than $200 in a year. (annually)

CAREER OPPORTUNITIES ARE BASED ON

Social Influences Demographic trends Geographic trends Economic Conditions Interest rates Inflation Consumer demand Industry Trends Foreign competition Changing uses of technology

1. Good Investors know what?

Something about the company before they invest.

What does the acronym SMART stand for?

Specific, Measurable, Achievable, Relevant Timely

Explain what a SMART goal is.

Specific: What exactly will you accomplish? Measurable: How will you know when you have reached this goal? Achievable: Is achieving this goal realistic with effort and commitment? Have you the resources to achieve this goal? If not, how will you get them? Relevant: Why is this goal significant to your life? Timely: When will this goal be achieved?

What kind of deductions are there?

Standard and Itemized

Blue Chip Stock

Stock of a large well established company

What is a bear market?

Stock prices are dropping A Bad Market

Penny Stock

Stock that trades at a relatively low price

Tax Credits

Subtracted directly from amount of tax owed.

What are some forms of Tax Assistance? Tax information Sources

Tax information Sources - IRS Tax Publication on the Internet Electronic Filing: (Tax Preparation Software, Tax Preparation Services, Computerized Software, H&R Block, Accountants, and Attorneys)

Form 1040A

Taxable income of 50,000 or less Adjustments to income are allowed Tax credit for child care and dependent care are allowed

Form 1040

Taxable income over $50,000 Itemized deductions

Why pay state and local taxes?

Taxes collected on the state and local levels provide the following benefits to the state and local population: education state welfare streets, roads, highways safety recreation

Training may be viewed in two main categories Technical Skills refers to specialized career training for a specific profession. Such as: - Informational Technology - Engineering - Accounting - Health Care - Law Enforcement - Law General Skills are traits adaptable to most work situations. Some can be acquired at school, while others require experience at work or organizational settings (get involved with clubs, sports teams, volunteer work etc).

Technical Skills General Skills

Dollar Cost Average

Technique of buying a fixed dollar amount. Investing equal amounts of money at regular intervals.

What is Taxable income

That is the income used to determine your taxes

How does this personal financial statements help in money management? Balance Sheet:

That's your current position

3)When Should I Invest?

The earlier you start investing, the sooner you can reach your financial goals. Investing is like "planting" money. A small amount of money invested will often grow to a larger sum over time. You've heard the phrase, "Time is money." With investing, time also makes money.

Explain some steps you could (research) do in evaluating purchasing certain stock?

The internet stock advisory service

Price per Earning (P/E)

The price-earnings ration (P/E Ratio) is the ratio for valuing a company that measures its current share price

Why are Corporate Earnings Important to shareholders?

They pay a large part in the increase or decrease of a stock

What are exemptions

This is an amount you can subtract from your adjusted gross income Parents get an exemption for each dependent child

There are two main reasons why you should invest:

To achieve financial goals To stay ahead of inflation

The IRS (Internal Revenue Service) is an agency of the

Treasurey

What does Evaluating Risk mean

Uncertainty is a part of every decision. Best way to analyze and minimize risk is to gather information from financial planning sources.

Open end Credit

Use as needed until reaching line of credit max. Example - Credit cards, department store cards, bank credit cards, incidental credit You pay interest and finance charges if you do not pay the bill in full when due

What are taxes

What you as a citizen have to pay the United States government.

Break-even analysis

When gains equal losses

Bull Market

When prices are rising or expected to rise

Bear Market

When prices of securities are falling

Collision insurance

Will cover the cost of repairing your car if it is damaged in an accident with another vehicle.

W-4

Witholding Allowances - allowances you get.

If your Professional tax preparer makes a mistake

YOU ARE STILL RESPONSIBLE FOR PAYING THE CORRECT AMOUNT, PLUS ++++++ ANY INTEREST AND PENALTIES!!!!!!

Yahoo Finance

You can tack the VIX using Yahoo Finance Ticker 52 week high low, closing price, dividend yield, volume

Explain Risk in regards to Investing.

You might lose your money.

ANY Investment you make should beat the rate of Inflation. Explain.

Your investments you make should give you a return on your money that will stay ahead of the cost of living.

The IRS collects ________________ and enforces _____________ _____________.

_____ taxes___________ ______ tax laws __________

Stock Portfolio

a collection of stocks from different individual corporations

Day Trading

a investor who attempts to profit by making rapid trades intraday

Credit Rating

a measure of your creditworthiness, often computed as a numerical score, using the FICO scoring system to analyze your credit history

Stock Holders

a person who invests in a corporation looking to make a profit

Commission Broker Fee

a service charge

5. What happens when a corporation splits its stock? How do we know a stock split?

a share is divided to larger numbers of stock.

chapter 13 bankruptcy

a voluntary plan proposed to the bankruptcy court for those who want to pay a portion of their debt over a period of up to five years. Trudees distribute money to creditors. Must have a regular income.

What is a cash flow statement?

actual inflow

Define net pay.

amount of money after deductions

What is gross pay?

amount you make before taxes

Credit

an arrangement to receive cash, goods or services now, and pay for them in the future. Includes credit cards and loans.

Limit Order

an order placed to buy a set amount of shares

General Skills

are traits adaptable to most work situations. Some can be acquired at school, while others require experience at work or organizational settings (get involved with clubs, sports teams, volunteer work etc).

How long should you keep records on personal property and investments?

as long as you own them

How is net worth calculated?

assets - liabilities = net worth

8. Par Value is?

assigned dollar value

Successul people have

An ability to work well with others in a variety of settings A desire to do tasks better than they have to be done An interest in reading a wide variety of materials An awareness of accounting, finance, and marketing fundamentals A knowledge of technology and computer software - Be sure to take: Computer Applications for College & MOC -- Microsoft Office Certification An ability to solve problems creatively in team settings A knowledge of research techniques and library resources Well developed written and oral communication skills An understanding of both personal motivations and motivation of others

wages

An amount of money paid to an employee at a specified rate per hour worked

Ticker Symbol

An arrangement of characters representing a particular security

Stop Order

An order to sell a particular stock at the next available opportunity after its market price reaches a specified amount

A stockholder is?

An owner of one or more shares of a corporation

The Due Date for Income tax returns is

April 15

No fault insurance

Automobile insurance in which drivers receive reimbursement from their own insurer, no matter who causes the accident

9. What are the Classification of Stocks?

Blue Chip Growth MidCap Cyclical Income Small cap Defensive Large Cap Microcap Penny stock

Buying on Margin

Borrowed money to buy securities

How do you complete Step 4 of the Financial Planning Process?Step 4: EVALUATE YOUR ALTERNATIVES

CONSEQUENCES OF CHOICES Opportunity cost - What you give up when you make a choice The cost or trade-off of a decision cannot always be measured in dollars. Sometimes the cost is your time EVALUATING RISK Uncertainty is a part of every decision. Best way to analyze and minimize risk is to gather information from financial planning sources. (Exhibit 1-3)

There are 3 types of Tax Return Forms. What are they?

Form 1040EZ Form 1040A Form 1040

Home insurance

Form of property insurance designed to protect an individuals home

20/10 Rule what is it - calculate

General rule of Credit capacity - Consumer credit payments should not exceed a max of 20% or your net income annually or more than 10% monthly (this does not include house payment which is a long - term liability) So if you make 10,000 annually (net) 10,000 x .20 (20%) = $200 You should not be making a total of more than $200 in a year. (annually) ----------------- So if you make $200 a month (net) 200 x .10 (or 10%) = 20 You should not have payments more than $20 a month that you have to make

NASDAQ

Global electronic marketplace for buying and selling securities

What is Adjusted Gross Income

Gross income less allowable adjustments (Gross income minus allowable adjustments)

52 Week High and Low

Highest and lowest a stock has traded in the previous year

TRADE-OFFS OF CAREER DECISIONS Career choices have risks and opportunity costs

In recent years many people have placed personal fulfillment over monetary reward and professional recognition Some refuse a job transfer to keep from moving their families Some opt for part-time employment to stay home with their kids Some give up secure jobs to operate their own business

Stock Split

Increases corporation outstanding shares

Daily High and Low

Index that seeks to provide confirmation of a market trend