econ final Flashcards
(238 cards)
1
Q
What is baby step 1?
A
1,000 in an emergency fund
2
Q
What is step 2?
A
pay off debt with the debt snowball
3
Q
what is step 3?
A
3-6 months expenses
4
Q
what is step 4?
A
invest 15% of income into roth iras and pre tax requirements.
5
Q
what is step 5?
A
college funding
6
Q
What is step 6?
A
pay off home early
7
Q
What is step 7?
A
build wealth and give
8
Q
what is the united states savings rate?
A
-0.6%
9
Q
What is saving money about?
A
emotion and contentment
10
Q
what are the three basic reasons for saving money?
A
emergency fund
purchases
wealth building
11
Q
Where is a great place to keep your emergency fund?
A
money market account from a mutual fund company
12
Q
what is your emergency fund not considered
A
an investment
13
Q
what is your frst savings priority
A
emergency fund
14
Q
what is the second thing you save money for?
A
purchases
15
Q
What is the third thing you save money for?
A
wealth building
16
Q
what is a key ingredient when it comes to wealth building?
A
dicipline
17
Q
What are pacs and what are they good for?
A
Pre- authorized checking
good way to build discipline
18
Q
What is a mathematical explosion?
A
compound intrest
19
Q
What is the 80/20 rule?
A
80% behavior and 20% head knowledge
20
Q
money market
A
emergency fund
21
Q
1000 in emergency fund
A
baby step 1
22
Q
amoral
A
money is neither good or bad
23
Q
sinking fund
A
saving money for purchase and letting the interest work for you rather than against you.
24
Q
true or false: your income level greatly effects your saving habits.
A
false.
25
what does tax favored mean?
that the investment is an qualified plan or has a a special tax treatment.
26
Whats an IRA?
individual retirement arrangement. tax treament on virtually anytype of investment.
27
what is SEPP?
simplified employee pension plan
28
who is eligible for an IRA?
everyone with an income
29
what is the maximum annual payment you can give to IRA?
5,000
30
what is a Roth IRA?
an after tax IRA that grows tax free.
31
why should you choose a roth IRA?
it has more choices
higher income at retirement
no taxes when you cash out
tons of flexibility
32
who is eligible for Roth IRA?
singles with an income less than 95,000
| couples with less than 150,000
33
under what conditions can you make penalty free withdrawals from Roth IRA?
5 years
over 59 year old
death or disability
first home purchase
34
what is the maximuim deductible amount for a SEPP?
45,000
35
who is a 401 K funded by? benefit?
you. if company goes broke you dont lose your money
36
Who is funding a pension plan
company. lose your money if the company goes broke.
37
where is a 403B found?
churches, hospitals, schools.
38
where is 457 found?
government employees.
39
what is dave Ramseys least favorite savings plan
457
40
how should you move your money from a Roth IRA over
direct transfer. do not bring your money home.
41
what are the 3 conditions you should have to roll to a Roth?
700,000 by age 65
can afford taxes separately not from Roth IRA
understand taxes will be due on the rollover amount.
42
what is ESA?
educational savings account
43
you should never buy a plan that....
freezes your options.
| automatically changed investments depending on the age of the child.
44
what does UTMA/UGMA stand for?
Uniform transfer/ gift to minor act
45
how should you never save for college?
insurance, savings bonds, prepaid tuition
46
403B
the typical retirement plan found in nonprofit groups such as schools and hospitals.
47
401K
the typical retirement plan found in most corporations.
48
Roth IRA
grows tax-free
49
SEPP
the retirement plan for self-employed people.
50
what does pretax mean?
the government is letting you invest money before taxes have been taken out.
51
what is not a good way to save for college?
savings bonds.
52
when is the only time that it is okay to borrow money from your retirement plan?
to prevent going bankrupt.
53
what IRA grows tax-free?
roth
54
what is not a retirement plan?
529
55
what percentage of Americans are living paycheck to paycheck?
70%
56
what was the first credit card
a diner's card
57
how did our great grandparents feel about debt?
thought it was a sin
58
how did our grandparents feel about debt?
thought it was stupid
59
how did our parents feel about debt
borrowed on a few things
60
how do we feel about debt
borrow on everything
61
what is the truth to the myth that if you loan money to a friend or a relative you are helping them
the relationship will be stained or destroyed.
62
what is the truth to the myth that by consigning a loan you are helping someone?
the bank requires a cosigner because the person isn't likely to repay
63
what is the truth to the myth that cash advance is a needed service for lower-income individuals
they are horrible, greedy ripoffs that arent needed and benefit no one but the owners of companies.
64
what percent of americans are first generation rich?
80%
65
what is the truth to the myth the lottery and other forms of gambling will make you rich
the lottery is a tax on the poor and on people who cant do math.
66
how much do high schoolers pay on the lottery
173
67
how much do college students pay on the lottery?
49
68
what is the truth to the myth car payments are a way of life and you'll always have one
driving used cars is what the typical millonaire does.
69
what is the cost of the average car payment
464 per month
70
what is the truth to the myth leasing your car is what sophisticated financial people do.
consumer reports, smart money magazine and a good calc will tell you that the car lease is the most expensive way to finance and operate a vehicle.
71
what is the truth to the myth you can get a good deal on a new car
a new car loses 70% value in first 4 years.
72
what is the truth to the myth ill take out a 30 year mortgage and pay extra.
life happens and something else will always seem more important.
73
what is the max lenght of mortage you should take out
15 years.
74
what is the truth to the myth its wise to take out an arm or ballon mortgage.
you will be moving when they foreclose
75
who does the adjustable rate mortage transfer the risk to?
yourself
76
what is the truth to the myth you need a credit card to rent a car or make purchases online or phone.
a debit card does all of that
77
what is the truth to the myth if I pay my credit card off every month with no annual payment or fee. bonus points. air miles
a recent Dun and bradstreet study found that when you use cash instead of plastic, you spend 12-18% less because spending cash hurts.
78
What is the truth to the myth ill make sure my teenager gets a credit card so he or she can learn to be responsible with money.
teens are a huge target of credit card companies today.
79
what percent of college students have debt before they graduate.
80%
80
what is the truth to the myth the home equity loan is good for consolidating and is a sub for emergency fund
you dont go into debt for emergencies.
81
What is the truth to the myth debt consolidation saves interest and you get a smaller payment
debt consolidation is a con
82
What is the truth to the myth debt is a tool.
the borrower is slave to the lender.
83
What are the steps out of debt
```
quit borrowing more money
you must save money
sell something
part time job or overtime
use the debt snowball
```
84
what does caveat emptor mean?
buyer beware
85
what are the four major ways companies compete for your money
personal selling
financing
tv, radio, internet and other media.
product positioning.
86
what is considered a significant purchase?
300$
87
what are the steps to develop power over purchase
```
wait overnight
consider your buying motives
never buy anything you don't understand
consider opportunity cost
seek wise counsel
```
88
financing
borrowing money and paying overtime.
89
how many advertisement do people view daily?
3,000
90
what is a sign of a well trained salesperson?
answering a question with a question
91
what do 90 day same as cash contracts convert to?
payments with interest up to 24%
92
what is the truth to the myth you need to take out a credit card or car loan to build your credit score.
the fico score is an i love debt score and not a measure of winning financially.
93
how long is it till your account information is removed from you credit report
7 years
94
how long does your information stay on your credit score if you go bankrupt?
10 years
95
what is the only information that may be legally removed from your credit report.
inaccurate information
96
what percent of credit reports contain mistakes
79%
97
what percent of accounts have been closed by the consumer but remain open
30%
98
what percentage of credit reports listed the same mortgage twice
22%
99
how often should you check your credit report
anually
100
what are the three credit bureaus
experian, transunion, equifax
101
what is the fastest growing white collar crime in north america
identity theft
102
What are the steps to take after identity theft?
place a fruad victim alert on your credit bureau report
get a police report
remember that you owe nothing and should pay nothing.
contact fraud victim division and furnish documentation
be persistant
103
to clean your credit report of inaccurate info what are the steps to take
write a seperate letter for each inaccuracy
staple a copy of your credit report
circle the account number.
104
how should all letters to the credit agency be sent out
certified mail with return receipt
105
with who should you lodge any complaints about your credit report
federal trade commission and your states consumer affairs division.
106
what is the best way to pay debt
come up with a plan
107
what is a collectors job?
only job is to get your money
108
always set your priorities by what four walls
food
shelter
clothing
transportation
109
between what hours can a collector call you?
8:00am-9:00pm
110
why should you not use a cease a desist letter with collectors
all negotiations stop and any hope of positive resolution is lost.
111
what may no credit or collector do?
take a bank account or garnish wages without proper lengthy court action. except in case of student loan debt
112
what plan should you use when you are unable to pay minimum payments.
pro rata plan
113
what does pro rata mean
the fair share or the percent of your total debt each creditor represents.
114
how do you use the pro rata plan
your your monthly cash to determine your total disposable income.. add up you total amount of debt, not including home.
115
what is total payoff
the total amount due on the account
116
total debt
the combined total of all your debts
117
what is disposable income
the amount of money that you will now send to each creditor
118
what is foreclosure
process by which the holder of a mortgage sells the property of a homeowner who has not make intrest or principal payments on time
119
What is repossession
is taking something back for failure to make payments
120
what is bankruptcy
a legal procedure for dealing with debt problems and businesses
121
what is garnishment
a court ordered attachment that allows a lender to take monies owed directly from a borrowers paycheck.
122
what is surrender of collateral
in a bankruptcy procedding, a debtor can give up property to the creditor in echange for a clean slate.
123
delinquency
broadly refers to a borrower not being current on his or her payment
124
where are lawsuits under 10,000 filed
general sessions court
125
how many days are you giving for a court date
30
126
what was passed in 1977 to protect you from unfair collectors.
FFCRA
127
what tactics are collectors willing to use
lying, harassment, being friendly
128
the pro rata plan includes what elements
repayment of debt as soon as possible
using the four walls to set priorities
giving a percentage of debt to each creditor
129
what is the fasting growing group of people filing for bankruptcy
under 25
130
what are a signs of crisis living and sloppy lazy money habits
overdrafts
131
what are some reasons why people dont do cash flow plans.
straight jacket connotation
been used to abuse them
budget never worked before
paralysis from fear of what they will find
132
What are some ways that cash flow plans do not work
leave things out
overcomplicate plan
dont actually do it
dont live on it.
133
what does a written plan remove
management by crisis from your finances
134
what will a writtten plan remove from your life
overdrafts, and stress, show overspending in areas
135
what is the easiest and most powerful plan in budgeting
zero based budget using the envelope system.
136
how long does it take to get a budget right.
3-4 months
137
monthly cash flow
form used to do a budget
138
irregular income form
form used by persons earning an inconsistant onthly income
139
reconcile
process used to determine if the balance in your checking registry matches the balance reported on the bank statement
140
what should your monthly budget include
fixed expenses
variable expenses
money to blow
141
what would account for a difference in balances in your checkbook registry and bank statement after reconciling the two
an error
outstanding checks
deposits that did not post
142
when is it proper for you to get a great deal
have in no way misrepresented the truth
have not set out to harm the other party
have created a win win deal.
143
what is the first key to huge bargains
negociating
144
what are the seven basic rules of negociating
```
always tell the truth
use power of cash
cash is emotional
cast is visual
cash has immediacy
understand the walk away power
shut up
thats not good enough
good guy, bad guy
if i take away technique.
```
145
what is the second key to huge bargains
patience
146
what is the third key to huge bargains
where to find good deals
147
what are some places to find good deals
```
individuals
estate sales
public auctions
couponing
garage sales
repo lot
flea markets
refunding
foreclosures
pawn shops
classified ads
consignment sales
```
148
rebating
sending in proof of purchase, receiving cash back
149
what does the flow of money in a family represent ?
value system under which the family operates.
150
how do men about emergency funds
boring
151
how do women feels about emergency funds
important key to financial life.
152
how do men get good deals
negociating
153
how do women get good deals
hunting
154
what is the number one cause of divorce in america
money fights
155
why does the nerd like doing the budget
it gives them control, and felel they are taking care of loved ones
156
what three things can lead to poor money managementt
time, poverty, fatique
157
what does a written plan give a single persom
empowerement, self accountability
| control
158
whos responsibility is it to teach children about money
parents
159
parents hould pay commissions not allowance
...
160
what three envelopes should you use for children
giving. spending, saving
161
at what age should a child get a checking account
13-14
162
commission
getting paid based on the work that you have done
163
how long should a budgeting committee meeting last
10-20 minutes.
164
how long is the average job
2.1 years
165
how many jobs will the average worker have
20
166
what percent of companies have fewer than 100 employees.
98.3%
167
what is the truth to the myth as you grow you change
you do not change your personality
168
wha is the truth to the myth you will learn and grow the most in the areas in which your weakest
you grow in strenghts.
169
what is your disc profile
a simple test that will yield tremendous insight into how you process decisions and what your natural tendencies may be.
170
what is d
hard charging driver that is task oriented and first looks to problems.
171
what is i
influencing
| people oriented, fun outgoing, concerned about people pleasing
172
what is s
stable
| amiable, loyal, does not like conflict
173
what is c
compliant
| analytical, loves detail, and loves procedures.
174
what are the three ways you want to contact a company
introduction letter
cover letter
resume
phone followup
175
what are the steps to a good interview
present yourself well, be on time, address everyone by name, offer a firm confident handshake, maintain eye contact.
176
how do you get started with a second job
be willing to sacrifice yourself.
have a detailed plan
choose the job or start a home based business.
dont give up
177
withholdings
taxes deducted from your paycheck
178
net pay
your actual take home pay
179
gross pay
your total wages from working
180
federal
tax used for government programs
181
when are most hiring decisions made
before the interview
182
what should you never invest purely for
tax savings
183
what should you never invest using
borrowed money
184
what does diversification mean
to spread around
185
as there is more liquidity what is there less of
return
186
what is ACD
a certificate of deposit
187
what are money market mutual funds
low risk money market accounts with check writings privaleges
188
what happens when you buy stock
you are buying a small piece of ownership in the company. your return comes as the company grows
189
what is a bond
a debt instrument by which a compnay owes you money
| your return is the money given and instrest
190
what is a mutual find
investors pool there money together.
191
are mutual funds a good long term investment
yes
192
what are some horrible investments
gold
commodities
day trading
viticals
193
large cap
growth and income funds
194
what record should you always check when investing
5 year track record
195
what is a list of your investments
portfolio
196
what is the least liquid of all investments
rental real estate
197
aggressive growth funds
small cap
198
savings account within an insurance company
annuity
199
what percent of any 10 year period in the stock market has made money
100%
200
what is the kiss rule of investing
keep it simple stupid
201
savings account with a certificate
C.D
202
how much money should put down for a house to avoid PMI
20%
203
how much money do you have to put down on a va loan
0%
204
what is the minimum you can put down on a standard loan?
3%
205
what should you think like when selling a home
retailer
206
what condition should the home be in
near perfect
207
what is the most important aspect of selling a home
curb appeal
208
when selling your home where should it be listed
internet
209
who should you not use at your realtor
friends or family
210
who should you always interview
realtor
211
what is not necessary when selling a home
home warranties
212
why is homeownership a great investment
forced savings plan
inflation hedge
grows virtually tax-free
213
title insurance protects you against what
an unclean title
214
when should you get a land survey
when you are buying more than a standard subdivision lot
215
homes are prices on what three things
location *3
216
where should you buy a house near
water or a view
217
what things should you overlook when buying a house
cosmetic appeal
218
what things can not be overlooked when buying a house
floorplan or street appeal
219
always have a home inspected by whom
a certified home inspector
220
when should you get an appraisal
if you have doubt about the price of a home
221
what homes should you never buy
mobile homes, trailers, timeshares
222
what is the best mortgage
the one hundred percent down plan
223
get a payment on no more than 25% of your take-home pay on a 15-year fixed-rate plan.
.....
224
horrible mortgage options
ARM- adjustable-rate mortgage
reverse mortgage
the accelerated or bi-weekly payoff
225
what is one reason you should never keep a loan
for tax advantages
226
basic ways to finance a home
1. conventional mortgage
privately insured
downpayment of 5-20%
2. FFH loan
downpayment of 3%
3. va loan
benefit veterans
downpayment of 0%
4. owner financing. the owner is the mortgage holder and you pay them.
creative in the structure of the loan
227
what is the best payment option
the conventional loan
228
who are people managers for
the lord
229
what does giving move people to be
less selfish
230
what is giving a reminder of
ownership
praise and worship
when you give its spiritual welfare
231
what should you never give with the motive of
having it returned
232
property tax
taxes paid by anyone who owns property such as land, a home, or commercial real estate
233
resume
a brief account of ones professional or work experience and qualifications
234
any income that is generated by working
earned income
235
a federal insurance program funded by taxpayer dollars that provides benefits to people who are retired, unemployed or disabled.
social security
236
tax income
taxes paid out by anyone who earns an income
237
tax collection and tax law enforcement
the international revenue service is the federal government agency responsible for
238
what is the difference between gross pay and net pay
net pay describes your pay after deductions.
