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31 Cards in this Set
- Front
- Back
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financial planning process |
review and revise plan --> determine financial situation --> evaluate financial goals --> asses risk --> create plan --> implement plan --> |
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wealth |
building up valuable resources or material possessions |
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financial plan |
a roadmap to help an individual reach their financial goals |
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net worth |
assets minus liabilities |
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FICO score |
the credit score lenders use to asses risk in extending loans to individuals |
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credit report |
a report detailing your financial history |
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Credit Ratings |
excellent = 750+ good = 700-749 fair = 650-699 poor = 600-649 bad = below 600 |
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college loan debt |
the amount of debt incurred by a student while attending a post-secondary institution |
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mortgage |
loan used to buy real estate |
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PITI |
total monitoring mortgage payments, including principal, interest, taxes, and insurance |
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fixed-rate mortgage |
a loan where the interest rate stays the same throughout the life of the loan |
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adjustable-rate mortgage (ARM) |
a loan where the interest rate changes with market conditions |
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portfolio |
all assets or financial holdings of an investor |
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diversification |
investing in many assets or investments to reduce risk |
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savings |
the part of your income not spent or used for immediate expense |
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certificate of deposit (CD) |
an investment made in a bank for a specified length of time at a specified interest rate |
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stocks |
a security that shows ownership in a company |
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shareholder |
an individual who owns shares of stock in a company |
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dividends |
earnings on each share of stock owned |
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preferred stock |
stock owners who get paid dividends first and who have priority over common shareholders |
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common stock |
shareholders who vote and earn dividends after preferred stockholders |
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mutual fund |
an investment that combines several stocks into one fund |
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bonds |
an IOU from an organization |
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401K |
a retirement savings plan supported by an employer in a for-profit business |
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403b |
a retirement plan for employees of public schools, hospitals, churches, or the government |
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traditional IRA |
a pre-tax investment option |
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Roth IRA |
an after-tax investment option |
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insurance |
a risk-reduction policy |
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whole-life insurance |
a contract that provides protection for an entire lifetime |
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term-life insurance |
a contract that provides protection for a specified time |
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how to improve credit score |
pay bills on time, don't max credit, diversify types of credit, don't increase limits |
