personal finance final

collection of multiple investments in different assets to meet your personal financial goal

portfolio

selling shares of stock for more than you originally paid

capital gain

investing is foolish because Jesus is coming soon

false

which need to do before you invest

Pay all bills on time

Pay off credit cards every month

Meet basic needs

which need to do before you invest 2

Save up for emergencies

Get health insurance

Contribute to your employer retirement plan

fundamental principle of investing

start early

market risk is

The risk that the entire economy may lose value

inflation risk is

The risk that your money loses purchasing power

regulatory risk

The risk that the company you invested in becomes illegal

liquidity risk is

The risk that you can't get your money out quickly and easily

which of the following is stock market truth

The market is the most effective wealth building tool

which is another stock market truth

The market is volatile but trends upwards

dollar cost averaging is

Buying the same dollar amount of stocks every month

diversification

Spreading out your investments to reduce risk

herd behavior is

The tendence for investors to act as a group

market timing is

Trying to buy low and sell high

how did stock market start

1600s colonial shipping companies sold ownership in ventures

What does IPO stand for?

Initial Public Offering

a stockholder is

Part owner of the company that offered the stock

a stockholder makes money if

They sell the stock at a higher price than they bought it

what is a corporation

A legal entity that is registered to do business

true of public traded company

Shares are bought and sold on a public exchange

which of the following is true of privately traded company

The common investor can’t invest without a relationship with the company

why may companies chose to go public

To acquire capital

which is reason to invest in stocks

So you can have ownership without liability

common stock is

The most basic form of stock ownership

preferred stock is

A fixed dividend per share no matter the stock price

a bond is

A loan to a company from investors with a maturation date

understanding stocks

random walk theory

beta analysis is

A measure of volatility relative to other stocks

fundamental analysis is

Evaluating how valuable a company is really

technical analysis is

Predictions about a stock regardless of intrinsic value

random walk theory proposes

The future performance of stocks is completely unpredictable

corporate earnings

a companys profits

earnings per share

Measurement of profit on a per share basis

cash dividends refer to

Income you receive from owning a company

book value refers to

The net worth of the company

how are corporate earnings useful in stock analysis

If earnings are strong investors are hopeful that will continue and grow

company annual report

A brochure highlighting company achievements over the last year

how is company annual report beneficial for stock analysis

It gives you insight into the recent history of the company

company prospectus

A report required by law about financial status and risks

how is company prospectus beneficial for stock analysis

It can give you an idea of the company’s financial status and risks

practice trading in stock market risk free

www.wallstreetsurvivor.com

why is short-selling fundamentally risky

Losses can (hypothetically) be infinite

which are types of bonds

junk, treasury, corporate

why do investors have more bonds and less stocks as they near retirement

Bonds typically are less volatile & have a more reliable return than stocks

mutual fund

A mix of securities that help investors diversify

actively managed funds have more fees than passive ones

True

annual expense ratio

How much the broker charges you to manage a fund

what is load

A fee to buy or sell shares in a mutual fund

difference between mutual fund and ETFs

ETFs trade during open trading hours

advantage of mutual funds and ETFs

Diversification

Automatic reinvestment of income and gains

not advantage of mutual funds

Flexibility of choosing individual stocks

which of the following is a reason to chose unmanaged index funds

Dart throwing monkeys perform as well as professional investors

objectives of mutual funds

Income, growth, social responsibility

good brokerages

Vanguard, Betterment, Fidelity

real estate cash flow

Rental income after paying operating expenses

speculator

Someone who buys an asset hoping it will appreciate

real estate investing is not a great fit for some people

It can be very time consuming and stressful

over-leveraged

Having too much debt so you can’t weather downturns

real estate is a way to get rich quickly

false

better wealth building strategy in real estate

Buying and holding

elements of successful real estate investing

Research and vet deals thoroughly

Get good systems and partners in place

Set up a limited liability company

not one of the Rs in BRRR

Return on investment

good reason to consider buying investment property

Property often appreciates in value

reason to invest in real estate

Returns can sometimes be very high

which is true of investing in collectibles

Only invest in collectibles you're truly an expert on

which is true of investing in gold

It's not great for building wealth but it's not terrible for storing wealth

tax-differed growth

Earn money, pay taxes later

pension

A guaranteed payment from the company during retirement

how many post-earning retirement years do you need to prepare for

30 years

how much money need to replace 40,000/year income for 30 years

1,000,000

3 ways build good retirement fund

Good markets, compound interest, and time

what percent of your income should you save for retirement

15%

philosophy wise when considereng work in retirement

Plan ahead so you can choose to work or not

retirement fund contribution

Money I put into my retirement account along the way

retirement fund distribution

Money I get from my retirement account when I retire

vesting is when

I take ownership of money my employer puts into my retirement

portability means

I can move my retirement to another account without getting taxed

automatic enrollment

When you employer automatically signs you up for a retirement account

automatic escalation

When your employer automatically increases your contributions

Monte Carlo simulation

A statistical analysis of the probability of your retirement amount

main Dif between Roth IRA and traditional IRA

In a Roth IRA, you pay taxes first and your investment grows tax free

what’s the highest percent withdrawal from your investments and you could live on them forever

4%

which can interfere with saving for retirement

Lifestyle inflation

Short-term thinking

Borrowing from your 401(k)

Paying for your kids’ college instead of retirement

Forced early retirement

Living longer than expected

when do minimum requirement distributions start for 401K

72

retirement fund beneficiary

The person who gets your retirement account if you die

**If you don’t have money when you retire, you’ll have to keep working, depend on your kids, or possibly end up homeless.**

\

true

social security

Government funded insurance for old age

**At what age can you claim social security with full benefits?**

\

67

**If you wait until age _____ to claim social security, you get 8% more per year.**

\

72

\
**Which of the following is a good strategy for saving for retirement?**

\

Automatically deposit into a retirement fund before anything else

health care proxy

Someone who can make medical decisions for someone else

power of attorney

Someone who can make legal and financial decisions for someone else

executor

Someone who makes sure someone’s final wishes are carried out

**What is the process called when someone dies without a will?**

\

Intestate

**Which of the following is a real reason someone should rewrite their will?**

\

if you move to a new state

**A will should be kept in a deposit box at the bank.**

\

false

probate

A court supervised process to transfer assets from a decedent to heirs

legal way to avoid probate

\
Joint tenancy with right of survivorship