Term
| What is the main difference between savings and investing? |
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Definition
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Term
| WHAT ARE SOME EXAMPLES OF SAVING AND INVESTING? |
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Definition
SAVING: PUTTING MONEY AWAY FOR A SHORT TERM GOAL.
INVESTING: BUYING A HOUSE |
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Term
| WHAT IS TIME VALUE OF MONEY? |
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Definition
Time Value of Money is the relationship between time, money, and rate of return, and their effect on earnings growth.
If you put a certain amount of money in the bank it’s a high possible that it will increase in value by earning interest.
Earned interest is when you let a financial institution or corporation use you money and you receive a payment for doing that.
The Time Value of Money Calculator can be used to perform many time values of money related calculations including the calculation of the Present Value or Future Value of a single cash flow.
TVM Calculator |
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Term
| WHAT IS COMPOUNDING INTEREST AND H OW DOES IT WORK? |
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Definition
Compounding, or compound interest, is the idea of earning interest on interest. Unlike simple interest, compound interest doesn’t use only the initial balance of your account; it adds up all of your money and then adds interest.
You earn money not only on your investment, but also on the amount your investment earns.
Your money grows exponentially unlike simple interest which grows at a constant rate. |
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Term
| what did albert einstein call compounding/ |
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Definition
| Albert Einstein was interested in the concept of compounding he called the “eighth wonder of the world”. |
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Term
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Definition
The rule of 72 tells one self how long it takes for your money to double in value.
It is an incredible way to earn more money with out lifting a finger.
Basically, all you have to do is transfer some of your earnings from your savings account to an investment |
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Term
| HOW DOES RULE OF 72 WORK????? |
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Definition
Here is how it works, divide 72 by an interest rate to determine the number of years it will take your money to double. Or you can divide 72 by a amount of years, and determine the interest rate you need to have to double your money.
For Example: Say you earn 6% on your money, how long would it take for your money to grow from 100 dollars to 200 dollars?
72 Divided by 6% Interest=12 years
Or: Say you want to save your money for 8 years, what interest rate you would need to make to double your money
72 Divided by 8years = 9% Interest |
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Term
| IS time very important when dealing with investment principles? |
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Definition
| Time is very important to investment principles. It’s important to start saving young, even if in small amounts its better than saving large amounts in a shorter period of time.(1 key investment principle) |
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Term
| RATE OF RETURN (KEY INVESTMENT PRINCIPLE) |
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Definition
| Rate of return is how fast your money grows. It is a critical factor in the savings and investment world. The higher your rate of return, the less cash you need to reach a goal |
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Term
| DIVERSAFICATION (KEY INVESTMENT PRINCIPLE) |
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Definition
| Diversification is the reduction of investment risk by spreading your invested dollars among many different types of investments. When you divide your money among different types of saving and investing, you reduce the chance or risk that any will really financially hurt you. |
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Term
| What is the relationsship between Tax and Inflation, etc |
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Definition
| Inflation occurs when the price of goods and services rise. In other words when the demand for a product rises the price does also resulting in a rise of price which equals inflation. For example when the demand for gas went up and there was a “shortage” so did price resulting in the $3.16 per gallon Americans had to pay for gas. Now taxes are the amount of money the government takes from your check. Or it can also be the amount of money added onto a price for a good. |
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Term
| WHAT ARE SOME INCOME INVESTMENTS EXPLAIN |
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Definition
Income investments are categorized into five different subjects.
The first is a savings account these accounts are the safest account and they are less risky.
The second category is a U.S. savings bond the government pays cash to investors and it’s also like a agreement between two people.
There are also certificates of deposits (CD) these are bonds given by credit unions and banks because they have their own versions.
Another is a money market account which is similar to a checking account but they pay you a higher interest rate than a savings account. |
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Term
| What i did not know i about growth investments? stockes(growth investment) |
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Definition
| Income investments are categorized into five different subjects. The first is a savings account these accounts are the safest account and they are less risky. The second category is a U.S. savings bond the government pays cash to investors and it’s also like a agreement between two people. There are also certificates of deposits (CD) these are bonds given by credit unions and banks because they have their own versions. Another is a money market account which is similar to a checking account but they pay you a higher interest rate than a savings account. |
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Term
| I think i am too young to buy land? Maybe not! What should i know about real estate?(growth investment) |
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Definition
Investors buy pieces of land, such as houses hoping to gain a profit.
Though you maybe thinking you are too young to own land this knowledge can spark ideas for your long future ahead.
Real estate isn’t limited to houses there are malls, apartment complexes, underdeveloped lands, commercial buildings, and farm land. |
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Term
| What are collectibles? (growth investments |
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Definition
These are considered rare hence their higher value. Paintings sculptures and works of art are respectable collectables.
You may have a stamp collection or baseball cards at home, these too are collectibles.
Since collectables are traded as rarely as they are found they are considered high risk. |
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Term
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Definition
| The longer the term the higher interest |
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Term
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Definition
| may limit # of check you can write per month |
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Term
| Corporate and Government Bonds |
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Definition
| Out o f all income invetments thses bonds typically pay the higest interest rate. |
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Term
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Definition
| are investments that represent ownership in a company. |
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Term
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Definition
| pools money from several investors abd uses the money to buy a particular type of investment, such as stocks. |
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Term
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Definition
| The difference between the purchase price and the selling price is the investor;s earnings. |
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Term
| What are some different types of cd's? |
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Definition
Rising rates:earn very high rate of interest.
Stock Indexed: Returned Earnigs based on the stock market.
Callable Cd's :Higher rates and long term maturities
Global Cd's: Combine higher interest rat eiwth the head of the future changes in the future.
Promotional CD's : Attempt to attract savers with gifts or special rates. |
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Term
| Simple interest calculation |
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Definition
Dollar amount* Interest rate* Length of time = Amount Earned
0.06=% |
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