Saving and Investments

401K/403B

retirement plans

why is compound interest important especially to the young

when you are young and invest money you earn interest on that money and eventually the interest is earned on former interest and in the long run a young person can invest little and make a lot

risk

why people should get insurance

mutual funds

your portfolio managed by a professional

what cant be used when determining car insurance

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Unnecessary Debt

Debt that you don't need; like interest on credit cards

Liquidity

How easy it is for you to access your money and investments

Where might you save money and where might you invest.

Save money in a bank or credit union or a 401K and a retirement plan. Invest your money in the stock market, bonds, CD,

What is the primary difference between saving and investing

Saving your money is staying at the same amount and it is there when you need it. Investing is when you make money off of the money you put in and not all investments are easy to get money out of when you need it.

what if I have a long time horizon what investment should I make.

a risky investment so you can have the opportunity to make a lot money because you don't need the money anytime soon so you have time to fix and mistakes that happen.

what type of investment has a high rate of return

a risky investment such as stocks

Portfolio

all you investments

Risk tolerance

amount of risk you are willing to take

why does it cost more for young people to be insured

because it is proven that they have a higher risk than older people and they are less experienced

factors to determine cost of car insurance

credit score type of car driving record age

CD

document that show that you deposited money into a bank for a period of time

two major advantages to 401K

employers can put money into the account also and they could match how much you contribute or any amount they want. And 401K are automatic and are taken out of your paycheck before taxes are taken out.

how can you reduce your rate for car insurance as a young person

get good grades avoid accidents take drivers ED no tickets zip code

opportunity cost

giving up something now in order to have money to invest later

IRA/ROTH IRA

independent retirement accounts

why is insurance important and what is it

insurance that the coverage of you and your person items in case of an accident. It is important because if you don't have insurance then you will be paying a lot out of pocket for what ever the accident had caused in losses

compound interest

interest made of interest

how can drinking and driving impact your insurance rate

it can cause your insurance or your parents insurance to sky rocket or even no longer exist because you are seen as a higher risk which means they would have to pay more on you if you got into another accident.

time horizon

length of your investment

what are different type of insurance

life- covers funeral cost and family dependents home- covers the cost of your house and all your valuables in case of robbery, fire, or if someone gets hurt on your property disability-covers the income of someone who can no longer work renters - covers your personal belongings if you are renting a place incase of robbery or fire or water damage health- covers any medical bills you may acquire dental-covers visits and any need of braces to a certain amount.

Bonds

loaning money to the government

Do all companies charge the same? and how do you get the best deal

not all companies charge the same some are more expensive than others and to get the best deal you need to shop around to see how much other companies are offering.

Stocks

risky investments; share of ownership in a publicly held company

Money Markey Account

saving accounts that insured by federal government and pays interest

least risky to most risky

saving accounts, cd, bonds, stocks

what is an example of opportunity cost

skip going out to dinner to save money for a down payment on a car

insurance premium

the amount a month that one pays for insurance

deductible

the amount you have to pay out of pocket before the insurance starts to pay

insurance

the coverage of loss

collision damage

the damage made to one or both cars in an accident

ROI

the interest rate on your investment

how can raising your deductible change the amount of coverage you receive

the more your deductible is the less the insurance company has to pay because more out of pocket money you are forfeiting which lowers your premium though.

policy holder

the person being insured

insurer

the person or company providing the insurance

policy

the type of insurance the one buys

why should young people have life insurance even though they don't have dependents.

they should have life insurance because they should get it when they are young and healthy because when they get older and get sick they will no longer be eligible for life insurance

why should someone keep money liquid and where should they keep it

they should keep it liquid for emergencies and for everyday spending and to keep them liquid they should keep them in checking and saving accounts at a bank.

two factors to consider before investing

time horizon and risk tolerance

Rule of 72

used to compare ROR's and how long it takes to double your money