1. Wants vs. Needs

   1. Needs are things you need to live (Food, water, shelter, space, etc)

   2. wants are things you don’t need to live (Car, Phone, Video game)

2. Short-term vs. long-term wants and needs

   1. Short-term wants and needs are things such as an emergency savings (in 1 year)

   2. long term is things you need in like (10 years) like savings

3. Different types of mutual funds (Global, Balanced, Index, Growth, Income, Money Market, etc.)

   1. global includes us and the rest of the world

   2. international doesn’t include the us

   3. money markets have the lowest risk because they invest in liquid securities like bonds

   4. income buy stocks that pay high dividends

   5. growth buy stocks that grow over time

   6. balanced is a mix of stocks and bonds

4. The goal when filing income tax return and date by which filing is required

   1. To lower your taxes as much as possible (Tax avoidance)

   2. April 15th 

5. Interest rates and how the impact spending/saving

   1. How much it costs to take a loan and higher interest rates discourage spending and encourage savings and vice versa

6. Retirement options (401K, Traditional IRA, Roth IRA; Roth 401k Invest in 401K first if company matches, then move to a Roth IRA if meet criteria (or Traditional if not))

   1. 401k is given by the employer of for profit companies from deductions on your paycheck. Employees pick investments and the employer can match. 

   2. 403b is for employees of nonprofits or the government.

   3. Traditional IRAs are tax deferred and you can set aside up to $7000 a year.

   4. Roth IRAs are similar except they are tax exempt

7. Common vs. Preferred Stock (characteristics of each)

   1. Preferred gets paid set dividends and if the company goes under gets paid first.

   2. Common gets paid a fluctuating dividend and gets paid after preferred. 

8. Stock classifications (defensive vs. cyclical, blue chip vs. speculative, income vs. growth)

   1. Defensive doesn’t follow business cycle (Utilities)

   2. cyclical follows the business cycle (hotels, airlines)

   3. Blue chip are the largest companies (Apple)

   4. speculative are cheap stocks under 5 dollars

   5. income stocks pay high dividends

   6. growth pay next to no/ or no dividend to grow the company quickly

9. Gross to Net Pay (know required vs. optional deductions; know how to calculate gross pay with overtime; know how to go from gross to net)

   1. before deductions and taxes

   2. hours < 40 salary + hours > 40 1.5 times salary

10. Simple Interest Formula (given to you); know what each of the elements stands for and how to calculate

11. Levels/Stages of Investing – Conservative 🡨🡪 Risky

    1. Stage 1: Savings Account

       1. money is for emergencies and unexpected purchases

       2. 6 months net pay

    2. Stage 2: Begin investing

       1. invest a comfortable amount

    3. Stage 3: Systematic investing

       1. for retirement

       2. regular basis

    4. Stage 4: Strategic investing

       1. managing a portfolio and investments

    5. Stage 5: Speculative Investing

       1. big risk

       2. a lot of gains or a lot of losses

12. Bull vs. Bear market

    1. Bull goes up Bear goes down.

    2. Bull is often longer than Bear

13. Stock index vs. Stock Exchange

    1. Exchange is where you buy individual stocks

    2. Indexes are where you buy into a chunk of portions of certain stocks

14. Variable vs. Fixed Expenses and examples of each

    1. Variable expenses are expenses that change each month like food, gifts, or clothes.

    2. fixed expenses don’t change like mortgage payments or car payments.

15. Calculating income earned through stocks (total income earned including dividends; capital gain/loss)

    1. Growth (dividends plus capital gains)/ how much you spent

16. Tax deferred grows tax free since you paid taxes before putting money in account (Roth IRA, Roth 401K) vs. Tax deferred (pay taxes when money is withdrawn (Traditional IRA, 401K)

    1. Roth IRA and Roth 401k pay taxes up front (Tax Exempt)

    2. everything else is tax deferred (pay when you withdraw)

17. Types of Saving Accounts; liquidity of each

    1. Regular Savings account (liquid)

    2. certificates of deposit (not liquid)

    3. securities (some are liquid)

18. Different types of bonds  (callable, convertible)

    1. Corporate are convertible to common stock

    2. municipal not convertible

    3. Government not convertible

19. Assets vs. Liabilities  

    1. Assets (things you own, equity) — liabilities (debt) = your net worth

    2. if net worth is positive then your solvent if not your insolvent

20. How market interest rates impact the market value of an existing bond

    1. High interest rates low value of bonds (seesaw)

21. Compound interest (you will not have to calculate; know how you make the most money when interest is compounded (frequency))

    1. The more frequent, the earlier, and the longer the better

22. Elements of a budget

    1. Estimate the income

    2. how much you save

    3. estimate expenses

    4. balance

23. Different types of financial institutions (full-service bank, credit union, brokerage firm)

    1. Brokerage firms allow you to buy security likes stocks or bonds. 

    2. Credit unions are non profits that give higher interest rates on savings. They deposit with NCUA

    3. full service banks allow you to save and invest in securities

24. Causes of bankruptcy

    1. loss of job, health problems, divorce

25. Inflation: problems associated with inflation; impacts on different groups demographically 

    1. More money leads to higher prices. Hurts the poor more.

26. Checking account (checkbook register, canceled check, stop payment order, bouncing a check, floating a check)

    1. Checkbook register is where you keep track of the checks that you write

    2. canceled checks that have been processed or cleared

    3. Overdraft when you write a check and there aren’t enough funds in your account

    4. floating a check is writing it before the funds are there and hoping they will be there when it is cashed

    5. Outstanding check that has not been cashed

    6. stop payment order is a request to not cash or process a check

27. Disposable vs. Discretionary income

    1. Disposable income is money you have after taxes and expenses

    2. discretionary income is after taxes and necessities for investing or saving

28. Writing a check accurately

    1. Need a payee

    2. need who it is from (address and name)

    3. signature

    4. amount

29. Annual Percentage Yield/APY (savings accounts) 

    1. Interest rate paid on an investment in one year

    2. The higher the better in a savings account

30. Annual Percentage Rate /APR  (loans, credit cards, etc.)

    1. Interest charged to borrowers as a percentage

31. Simple vs. Compound Interest

    1. Simple interest gains the same amount every time

    2. compound pays interest on the previous interest as well 

32. Risk vs. Return Relationship

    1. Higher the risk higher the return

33. Opportunity Cost of certain situations

    1. If you get pizza from Dewey’s your opportunity cost is you didn’t get Adriatcios

34. How to make money from stocks

    1. Capital gains and dividends

You will have to differentiate between major concepts such as:

35. Optional vs. Required Deductions

    1. Required deductions are medicare, SS, state, local, and federal taxes

36. Different types of Investments and Liquidity

    1. Stocks are liquid assets

    2. bonds are not

    3. mutual funds are liquid investments