[Self Dev] Personal Finance for Dummies Flashcards
Personal Finance for Dummies
6 common mistakes
- Delay decisions,
- unnecessary expenses,
- financial fraud victim,
- lack of planning,
- lack of information,
- Decisions based on emotions
Personal Finance for Dummies
6 topics you must know
- Expenses,
- taxes,
- savings,
- investment,
- insurance,
- goal planning
Personal Finance for Dummies
What are the considerations for evaluating the reliability of financial professionals?
- Investigate their trajectory, professional experience, and education
- Investigate their relationship with customers
- They are not going to look after your well-being
Personal Finance for Dummies
What are the 5 key points to overcoming obstacles to achieve financial success?
- Plan based on salary
- Financial knowledge for better decisions (avoid mistakes)
- Investing
- Finances are personal and confidential
- Be prepared (emergency funds)
Personal Finance for Dummies
Why are media sources considered unreliable for learning finance?
They are dependent on advertisements, and their content may be focused on advertising needs rather than providing objective financial information.
Personal Finance for Dummies
What are consummer goods, Assets and Liabilities?
Net Assets = Financial Assets - Financial Liabilities
Consumer Goods (not assets): Car, clothes, laptop, …
Financial Assets: Cash or everything that can be converted into
- Actions
- Bank accounts
- Business
- Real state (not home)
- Retirement accounts
- …
Financial Liabilities: Your debts
- Loans
- …any debt
Personal Finance for Dummies
3 actions you must take to overcome your financial challenges
- Cancel your debts (first, the ones with high interest)
- Have an Emergency Fund: Cash for 6 months of spending
- Learn financial skills (taxes, savings, invest, …)
Personal Finance for Dummies
What is a FICO and why you need 780+?
Credit Score based on the Credit Report.
To have better chances to acquire a loan or a credit card, I must have a good Credit Score
Personal Finance for Dummies
3 things you have to remember about getting a better credit score
- Pay your debts on time (can use auto-pay)
- Reduce and seek debt refinancing options (less interest)
- Third parties can’t repair your credit score.
Personal Finance for Dummies
What is good debt and for what you can use it?
Generate an outcome in the long term (Low-interest, tax-deductible)
A business, investment, education, real estate
Personal Finance for Dummies
What is a good percentage for bad debt and how you calculate it?
A good bad debt is 0%
📏 bad debt range = 📉 bad debt / 💰 annual income
Personal Finance for Dummies
What is the floating game with credit cards?
Period where you don’t pay interest (a delay of the payment)
Avoid it if:
- You spend more with them
- You can’t save money
