Unit 3: Investing and Budgeting
diversification
to diversify your investment portfolio so you are not relying on the success of one company
utilities
water, gas, electric
how does inflation affect investing
-rise in general prices -stock market historical has a higher return than the rate on inflation
gross pay
amount of money before taxes have be taken out
wages
amount of money paid to an employee at a specified rate per hour worked. If you work more hours, you will be paid more
mutual fund
collection of stocks/bonds, typically chosen and actively managed by an "expert" in exchange for a fee from each investor
bound
debt security in which the company or government owes the investor a debt, least riskiest
ways to cut costs
if you have a deficit and cut your expenses on movie channels you're making is cheaper
IRA roth
individual retirement account is an investment option for any young person entering the full time workforce
basics of budgeting
keeping you expenses less than your income so you have a surplus
net pay
money left over after taxes have been taken out
deficient
negative number
discretionary spending
optional spending on your wants, as opposed to need
stockholder
people who purchase stock
surplus
positive number
pension
retirement account that a employer maints to give an employee a fixed payout at retirement
401K
retirement savings plan sponsored by an employer which lets workers save and invest some of their paycheck. Your employer is going to match your contributions
salary
set amount of money paid to an employee for a set period of time worked. You paid the same no matter how many hours you work
stock
share of stock represents a fractional ownership of a company, which an individual buys in hopes of earning money and a company issues in order to raise funds, riskiest type of investment