pers fin test 2
Which President of the United States advocated for privatization of some Social Security benefits not long after winning re-election?
GWB
The two building blocks of advanced investing are_________________________
High Risk & Investment Management
Which government agency collects federal taxes?
IRS
Social Security was set-up as a Pay As You Go (PAYG) system, what could this mean?
Total Social Security taxes paid by those under 65 will be equal to the benefits paid to the retiree
junk bond
a bond which is considered below "investment grade" due to a significant risk of default by the issuer
Real estate investment trust (REIT)
a company that owns and operates income-producing real estate can be publicly traded on major stock exchanges
risk v reward
a financial analysis comparing the potential gains from an investment against the potential losses
Real Estate Mortgage Investment Conduit (REMIC)
a financial body that purchases mortgage-backed securities (stocks & bonds) to resell to investors with new terms will make the sale profitable
mutual fund
is managed investment fund that pools money from many investors to purchase securities
managed account
is owned by an individual investor and supervised by a professional money manager serviced by a professional who will manage your portfolio to meet your specific objectives and needs in the past, was only available to insitutions
depreciation
is the decrease in value of an asset
primary residence
is the main dwelling, typically a house or apartment, where a person lives
real estate investment
is typically the purchase of residential, unimproved or commercial property, or a combination of both, based on the investors' goals
unimproved land
land that does not have certain basic services necessary to utilize it for other purposes. These include electricity, telephone, street access, or water
mutual funds are professionally managed on bhealf of ___ mutual-fund holders, whereas managed accounts are personalized investment portfolios tailored to the specific needs of an ___ account holder
many, individual
medicaid
medical insurance for the financially disadvantaged
medicare
medical insurance for those 65 and older
investment management
most often refers to portfolio management and the trading of securities to reach a specific investment objective
security
negotiable financial isturment (stock or bond) that olds some type of monetary value
Choose the term that best labels the following: A payment made during a person's retirement after working for a certain amount of time with the organization.
not Roth RA/401k
Which of the following would not be a wise move to save for retirement for someone that is 30-years-old today?
not saving for retirement because they are relying on Social Security to replace their retirement savings
acceptable risk
occurs when the cost of managing a certain type of risk is workable
limited partnerships
one or more general partners, who manage business and one or more limited partners, who are liable only to the extent of their investments
deflation
opposite of inflation, occurs when prices continue to fall
stock option
paying for the right to buy a stock at a given price
The most important thing to remember about retirement is...
planning is key - identify cash flow, determine expenses, and create a program to save for the future!
Which of the following individuals would most likely not receive a pension during retirement?
private school teacher in Florida
financial service professionals
provide many different services, such as investment management, income tax preparation and estate planning
goals of great society
reducing poverty improving education addressing civil rights
commercial property
refers to buildings or land intended to generate a profit, either capital gain or rental income
Which of the following are challenges facing Social Security?
rising life expectancy of beneficiaries
great depression
sever economic crisis throughout the United States and other industrialized countries that began in the late 1920s until the Second World War
new deal
several government programs porposed and set forth by President Franklin D. Roosevelt during the grate depression to improve the economic and personal well-being of Americans
social security
signed into law by FDR as a result of the great depression with the goal to provide a safety net (income) for individuals who cannot work due to no fault of their own
When Social Security was signed into law by President Roosevelt, what was the percentage of population over the age of 65 compared with today?
significantly lower
who else benefits from social security
disabled widows children of deceased workers
in what year was the social security act passed
1935
David retires at the age of 70, the last year he worked he earned $40,000 and his social security payments for the first ear total $20,000. What is his replacement rate?
50%
those earning between $25,000 - $34,000 must pay a ____ tax on SS
50%
how many ppl that receive social security are retirees
70%
Those earning more than $34,000 can pay federal tax of up to ___ on SS
85%
Exchange Traded Fund (ETF)
A type of investment fund that is traded on a stock exchange.
Modern Portfolio Theory (MPT)
An investment model developed by harry markowitz where the investor attempts to take minimal level of market risk to capture maximum-level returns for a given portfolio of investments an optimized portfolio generates an optimal return given what the investor is willing to risk
Precious metals are a form of global currency. What would this be considered?
Asset that can be liquidated, or sold
How does investing help you accumulate wealth?
By generating positive cash flow
Which of the following are contributing to problems facing Social Security?
Increased life expectancy amongst the current Baby Boom population
for folks earning under $24,999 there is ___ federal tax on SS
NO
Which of the following is true for taxes on people aged 65 and older? A. They go directly towards services favored by those over age 65 B. All of these C. They decrease, as those over 65 see increases of capital gains D. They are mandatory, as per the federal and state government
NOT B
Which of the following realities is the biggest concern facing Social Security today?
NOT Far more workers than beneficiaries NOT Lifespans are increasing for beneficiaries combined with higher wages for workers
Which of the following is true with regards to Social Security as it sits today?
NOT There are more workers than beneficiaries in the American labor force. NOT Future benefits are not always promised NOT all of these Current workers pay for current recipients
Which of the following is likely true for a self-employed contractor?
Not won't recieve ss beenfits
enrolled agent
a person authorized to represent a taxpayer to the IRS administrative courts for audit and other purposes
Registered Representative (RR)
a person who works for a brokerage company that is licensed by the securities and exchange commission (SEC)
insurance
a plan by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium
retirement management
a plan to manage one's cash flow needed during years of retirement the process of deciding the goals of retirement income and the steps needed to reach these goals
income tax
a tax imposed by a government directly on income, especially an annual tax on personal income
Certified Public Accountant (CPA)
a title given by the american institute of certified public accountants to those who pass an exam and meet work experience requirement
Understanding wealth and how to continuously add to it is another way of ____________________________.
accumulating wealth
According to the video, through _______ ______________ one can get their money to work hard for them if the tools discussed are used.
advanced investing
Current Full Retirement
age 66 will earn 100% of benefit
electronic trading
also referred to as e-trading, is a method of trading securities (stocks/bonds/etc) electronically
high risk investment
an investment that may not be financially safe or secure but generally yields a much higher return
precious metals
any of the less common and highly valuable metals (as gold, silver, and the platinum metals)
cash generators
anything that one owns that generates a cash flow
Financial professionals work in ALL of the following areas EXCEPT: investment/securities insurance taxes appraisal of collectibles
appraisal of collectibles
For an effective retirement plan to operate, earnings from what must replace wages?
assets
other cash generators
assets people can generate in cash to fulfill retirement requirements (inheritance, business, assets can include 401k plans, 403b plans, Roth IRA, Money Market Accounts, U.S. Treasury Bonds, and more
delayed social security
available at age 70, those that take this earn 32% more during their lives
keys to accumulating wealth
buying, holding, and selling assets having investments appreciate in value generating positive cash flow ass risk to accelerate growth or loss
The following are all examples of speculative investments EXCEPT: a classic car raw land gold silver
car
Retirement is the time when ___________ becomes more critical, as we may not be earning wages. It is the lifeline of survival.
cash flow
pensions
defined benefit plans for retirement a payment made from a person's retirement until death fro time and/or wages they contributed during their employmentq
cash flow
describes the real or virtual movement of money
Efficient Frontier refers to your portfolio operating at an extremely ___________ level.
efficient
great society
established by president johnson during the 1960s, continues some new deal policies of the 1930s
________________ refers to the use of debt to acquire additional assets.
financial leverage
advanced investing
focuses on concept of money and the investing of money on a large scale
reitrement age
for those born between 1943-1954, and it will rise to 67 for those born in 1960
protecting what you have
how to conquer financial risk
managed accounts
indidvidually tailored investments that allow you to keep direct owenership of the assets managed on your behalf
investors
individuals who commit money to an investment product with the expectation of financial return
Certified Financial Planner (CFP)
individuals who successfully complete an extensive certification process with extensive exams in the areas of financial/estate planning, taxes, insurance, and retirement
Long Range Budgeting is all about ______________ cash flow.
inflation adjusted
medigap insurance
insurance that covers costs not covered by medicare
____________________________ is the expert asset management of various securities (stocks & bonds) and other assets, such as real estate.
investment management
capital gains tax
is a tax on the profit from the sale on stocks, bonds, precious metals and property
When investing keeping it __________ is good financial advice.
simple
people generate cash flow for retirement by
social security other cash generators pensions
diversification
spreading risk across different asset types, including stocks, bonds, and cash
inflation
the rate where the level of prices for goods and services rise
If nothing is done to change Social Security by 2050, what is anticipated to happen?
the system will collapse
speculation
the taking of a big risk in business in hopes of making a big profit
portfolio
the total holdings of the securities (stocks, bonds, etc) of a financial institution or private investor.
interest bearing notes
these are investments such as bonds and certificate of deposits that pay occasional interest
monetary assets
those items that are close to cash such as securities
optimize
to make as effective, perfect, or useful as possible
short selling
trading strategy that seeks to capitalize on an anticipated decline in the price of a stock
early social security
typically a worker retiring at age 62, but will earn benefits at a reduced rate
generating positive cash flow
understanding your money to keep more of it
financial leverage
using other peoples money to attain a higher return on your investment
