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
...
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