Financial Literacy Terms Flashcards
(26 cards)
gross income
total money earned before any deductions like taxes, etc.
net income
bottom-line profit made after deductions and taxes
passive income
money earned from sources other than a traditional job
active income
money earned from a traditional job
FICA taxes
Social Security and Medicare taxes (named after the laws that created them)
FICA Law
the law that created Social Security and Medicare
Federal income tax
a tax levied by the United States government on the annual earnings of individuals
State income tax
a tax levied on the annual earnings of individuals by the state that they live in
Sales tax
a tax levied on an individual when they buy something. Some states do not have a sales tax
mandatory employee benefits
Social Security, health insurance, worker’s compensation, and Family and Medical Leave Act
voluntary employee benefits
Retirement plans, sick days/vacation days, education allowance, housing and car allowances, miscellaneous perks, inflationary raises
banks
establishments for the custody, loan, exchange, or issuance of money for the extension of credit and for facilitating the transmission of funds
credit union
an organization that gives small loans to its members at low interest rates and offers other banking services
loan agencies
agencies created to provide individuals with specialized loans
quick loans/payday loans
companies that provide loans with higher-than-usual service fees and interest rates
stocks
the capital raised by a business or corporation through the issue and subscription of shares
bonds
a certificate issued by a government or public company promising to repay borrowed money at a fixed rate of interest at a specified time
mutual funds
a practical, cost-efficient way to help build a diversified portfolio of stocks, bonds, or short term investments
mortgage equity
your share of the value of your home
hard assets
collectibles that you save over time that you hope will increase in price
financial growth
when a company makes money
economic growth
when a company makes money the previous year after adjusting for inflation
income mutual funds
companies that have been established and will probably grow
growth mutual funds
investments in start-ups that could yield high returns but have high risk
