economics vocabulary Flashcards
(24 cards)
Negative Net Worth
When your liabilities are larger than your assets.
Financial Plan
A game plan that evaluates your current assets and debts, identifies the things you want/need and lays out a strategy to pay for them.
Principal
The original amount you are investing.
Compounding
It’s MAGIC. The ability of an asset to generate earnings that are then reinvested and generate their own earnings.
Budget
An itemized listing of what you expect to make (income) and what you think you will spend (expenses).
CD
A savings certificate issued by a commercial bank entitling you to receive interest. This certificate bears a maturity date, which means you cannot withdraw your money for a specific time period—6 months, 1 year, or 5 years.
Skimming
Electronic method of capturing a person’s personal information. They use a small device that scans your credit card and stores the information contained the magnetic strip
IRA
Personal retirement plans that give you a tax incentive for participating. Only requirement for opening one is that you must use earned income
Dumpster Diving
Retrieving personal paperwork and mail from trash dumpsters.
401 K Plan
Having your employer deduct cash directly from your paycheck pretax. Some employers also contribute cash to this retirement plan—called matching.
Supply
The quantity of a product or service that businesses are willing and able to provide at a particular price.
Demand
The quantity of a product or service that consumers are willing and able to buy at a particular price.
Opportunity Costs
Whenever limited resources are used to satisfy one want or need, there are an unlimited number of other wants and needs that remain unsatisfied
Speculative
An investment with high risk, but may produce high profit.
Scarcity
The problem, which faces individuals, businesses, governments of satisfying unlimited wants with limited resources.
Bond
When you buy this investment, you are actually making a loan to the city, state, or federal government, or a corporation.
Mutual Fund
An investor buys shares in a fund which includes stock, bonds and money markets–the fund manager selects the assets contained in the fund.
Spyware
Software that covertly gathers info about you through your internet connection without your knowledge—its purpose is usually for advertising.
Needs
Things necessary for survival, such as food, clothing and shelter.
Phishing
Using fake emails that appear to come from banks and other companies to try to con you out of personal info.
Wants
Things that are not necessary for survival but that add comfort and pleasure to our lives.
Money Market
A savings account that offers a higher rate of interest in exchange for larger-than-normal deposits. You have easy access to your money—can usually write a check to withdraw.
Assets
The value of what you own or have invested.
Liabilities (debts)
The money you owe.
