chapter 8

1. wealth and prosperity

2. financial security

fill in the blank 

reasons for saving: 

1. Savings leads to ______ and _________ for a family/nation 

2. More savings leads to more _______ ________

the grasshopper and the ant

fable written by Jean de la Fontaine

jean de la fontaine

fill in the blank

the grasshopper and the ant is a fable written by _____ ___ ___ _______

1. grasshopper

2. ant

fill in the blank

in the fable the grasshopper and the ant,

1. The __________ didn’t work or save during the summer 

2. In the winter, she was not prepared but the hard-working ____ was ready

investments 

commitment of current resources in expectation of future profit

leonardo da vinci

fill in the blank

an example of an investment is “The Ant and the Grain” by _________ ___ ______ (planting a grain or seed now will lead to crops in the future)

Genesis 47

what book and chapter in the Bible did Egypt go through a time of plenty?

joseph 

fill in the blank 

______ saved during the plenty to prepare for the upcoming famine

1. private sector

2. research and development

fill in the blank

modern day examples:

1. Most savings in America come from the ______ ______ 

2. Businesses invest in _________ ____ ___________

• interest

• dividends

fill in the blank

the incentive to save is the desire to gain _______ or _______

reward

fill in the blank

the anticipation of a _______ prevents money from being spent in the present

saver 

the person who puts their money in the bank

creditor 

the bank that takes the money and lends to another

debtor

the one who borrows the money from the bank/saver

inflation

caused by the printing of excess money

increasing 

fill in the blank 

inflation results in the price of goods and services ________

1. scarcity

2. increase

fill in the blank

other causes of inflation:

1. ________ in supply of goods and services

2. ________ in cost of goods and services

1. hide

2. profit and nothing

fill in the blank

wise savings (parable of the talents):

1. A wise person doesn’t ____ money away 

2. Invested money leads to ______; “hidden” money leads to _______

transaction account

what’s the other term that a checking account can be called?

transaction account (checking account)

allows checks or debit withdrawals to occur up to the amount in the account

check 

written order that authorizes a bank to withdraw money from an account

savings account 

only allows limited transactions; allows an account owner to earn interest

limited transactions

fill in the blank

a savings account only allows ______ ___________

interest

fill in the blank

a savings account allows an account owner to earn _______

certificate of deposit (CD) 

an account that guarantees a set interest rate and a specific maturity date

1. set interest rate

2. maturity date

fill in the blank

the certificate of deposit is an account that guarantees a ____ _______ _____ and a specific ______ _____

money market account

fill in the blank

allows limited transactions and pays an interest rate that changes with the demand for the loan when there is a certain amount of money in the account

1. limited transactions 

2. changes 

3. money 

fill in the blank

a money market account allows ______ __________ and pays an interest rate that ______ with the demand for the loan when there is a certain amount of _______ in the account

federal deposit insurance corp (FDIC)

insures bank accounts up to $250,000

insurance 

contract between two parties in which one party protects the other against certain types of loss in exchange for payments called premiums

premiums

fill in the blank

insurance is a contract between two parties in which one party protects the other against certain types of loss in exchange for payments called __________

pension plan

an arrangement provided by an individual’s employer for the intent of providing for the employee’s retirement from work

defined benefit plan 

promises to pay a certain amount per month after retirement based on salary and length of service

defined contribution plan

both employer and employee contribute to retirement; not a promised amount (ex: 401k)

extended warranty

insurance for repairs or replacement of a certain item

collateral 

something of value a lender can claim in the event of non-payment

homeowners insurance

required if a person takes out a loan to buy a house; in the case of non-payment, the bank forecloses (sells home or property) to recover the balance of a mortgage

forecloses

fill in the blank

homeowners insurance:

in the case of non-payment, the bank _________ (sells home or property) to recover the balance of a mortgage

2010 affordable care act (ACA) 

what’s an example of a healthcare insurance? 

premium 

the amount that one pays for a policy

premium

the amount that one pays for a policy

deductible

the amount you pay each year before the insurance co. pays its share on a claim

copay 

small portion paid for the cost of a doctor’s visit

1. Age

2. Driving Courses

3. History

4. Health Screenings

5. Student Grades

6. Healthy Lifestyles

list the behaviors that lower premiums. 

1. intermediaries

2. loan

3. borrowed

4. repaid

fill in the blank

investment strategies:

1. Invest funds in various __________

2. Intermediaries _____ them out

3. Businesses use __________ money to build facilities and buy equipment

4. Investments are _______ and interest benefits intermediaries and savers

unrealized loss

holding securities that have lost value

realized loss

security sold at a loss

diversification 

investing in different types of investments within an asset class

traditional IRA

reduces taxable income for the year it is invested

roth IRA

contributions are taxable while interest earned on the contributions are not taxable

educational savings account

parents saving for the education of their children

stocks

resources corporations gather by selling ownership in their business

corporation

legal entity which is distinct from the people who own it

shares

equal portions of a corporation’s stock

stockholder

owns a portion of a business determined by the amount of stock he holds

limited liability

stockholder does not have to pay firm debts, they only lose their investment

dividends

shares of a corporation’s profit

• common stock 

• preferred stock 

list the two types of dividends.

bond

guarantees the bond-holder the amount of the original investment plus interest by a certain date

mutual funds

investment companies that combine the resources of all their shareholders and invest the $ in a wide variety of areas

liquid investments 

assets that flow easily because they can be converted easily into other investments or cash

1. amount invested

2. rate of return

3. time

(ART)

list the three elements to determine when investing.

bid

an offered price put forth by a buyer

initial public offering (IPO)

a new company initially decides to sell shares of stock

blue-chip stocks 

stock of large companies that have been in existence for a long time

risk-averse investor 

chooses a lower risk investment when presented with investment options

compulsory saving

forcing individuals to save a certain portion of their salary

social security

all citizens of America must pay into this old-age insurance fund

franklin d. roosevelt 

fill in the blank

social security was created in 1935 by ________ ___. __________ with the Social Security Act

social security card 

your legal name and a SSN assigned to you

• 62

• 66-67

fill in the blank

social security savings can be accessed at the age of ___ or ___-___

survivor benefits

fill in the blank

if they die before 62, a family member may apply for _______ _________

worker’s compensation 

a form of insurance paid by employers that pays medical expenses caused by an on-the-job injury and compensation for lost wages caused by a work-related injury

social security disability program

designed for workers who do not have private disability insurance but have paid into SS and get a serious injury that keeps them from working again

unemployment insurance

financial help for people who have lost their job through no fault of their own