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13 Cards in this Set

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WHAT ARE THE 6 STEPS IN LEARNING TO CONTROL YOUR ASSETS?
1. TAKE AN INVENTORY OF YOUR FINANCIAL ASSETS.
2. KEEP TRACK OF ALL YOUR EXPENSES.
3. PREPARE A BUDGET
4. PAY OFF YOUR DEBTS
5. START SAVINGS PLAN
6. BORROW $$ ONLY TO BUY ASSETS THAT HAVE POTENTIAL TO INCREASE IN VALUE.
WHY IS REAL ESTATE A GOOD INVESTMENT? TWO ANSWERS
1. A HOME IS AN INVESTMENT YOU CAN LIVE IN.
2. ONCE YOU BUY A HOME PAYMENTS ARE RELATIVELY FIXED(RENT RISES QUICKLY)
WHAT IS TERM INSURANCE
THIS TYPE OF INSURANCE IS PURE INSURANCE PROTECTION FOR A GIVEN NUMBER OF YEARS THAT TYPICALLY COSTS LESS THE YOUNGER YOU BUY IT
WHAT IS WHOLE LIFE INSURANCE?
LIFE INSURANCE THAT STAYS IN EFFECT UNTIL AGE 100
WHAT IS VARIABLE LIFE INSURANCE?
WHOLE LIFE INSURANCE THAT INVESTS THE CASH VALUE OF THE POLICY IN STOCKS OR OTHER HIGHG-YIELDING SECURITIES.
WHAT IS AN ANNUITY?
A CONTRACT TO MAKE REGULAR PAYMENTS TO A PERSON FOR LIFE OR FOR A FIXED PERIOD.
WHAT IS SOCIAL SECURITY?
THE TERM USED TO DESCRIBE THE OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM ESTABLISHED BY THE SOCIAL SECURITY ACT OF 1935.
WHAT IS AN IRA?
INDIVIDUAL RETIREMENT ACCOUNT ~ TRADITIONALLY, A TAX-DEFERRED INVESTMENT PLAN THAT ENABLES YOU (AND YOUR SPOUSE, IF MARRIED) TO SAVE PART OF YOUR INCOME FOR RETIREMENT.
WHAT IS A SIMPLE IRA?
FOR COMPANIES WITH 100 OR FEWER EMPLOYEES AND EMPLOYEES CAN CONTRIBUTE UP TO $6000 OF THEIR INCOME ANNUALLY, COMPARED WITH $2000.00 LIMIT OF REGULAR IRA'S.
WHAT ARE THE BENEFITS OF THE 401(K)?
1. MONEY YOU PUT IN REDUCES YOUR PRESENT TAXABLE INCOME
2. TAX IS DEFERRED ON THE EARNINGS
3. EMPLOYERS OFTEN MATCH PART OF YOUR DEPOSIT.
EXPLAIN KEOGH PLANS?
IT'S LIKE AN IRA FOR ENTREPRENEURS. THE MAXIMUM THAT CAN BE INVESTED IS $30,000.00 PER YEAR. THE AMOUNT WAS ORIGINALLY MUCH LOWER, BUT THE GOVERNMENT WANTED TO ENCOURAGE SELF-EMPLOYED PEOPLE TO BUILD RETIREMENT FUNDS.
HOW CAN A PERSON ACCUMULATE ENOUGH CAPITAL TO BECOME FINANCIALLY SECURE?(4 THINGS)
1. FIND A JOB
2. TRY TO LIVE AS FRUGALLY AS POSSIBLE
3. SAVINGS CAN BE USED TO GENERATE MORE CAPITAL.
4. INVEST THE MONEY WISELY(REAL ESTATE IS A GREAT START)
WHERE IS THE BEST PLACE TO KEEP A SAVINGS?
IT'S BEST TO INVEST IN STOCK EVEN THOUGH THEY TEND TO GO UP AND DOWN. BONDS HAVE NOT TRADITIONALLY BEEN A GOOD INVESTMENT.(IT'S NOT WISE TO KEEP LONG-TERM SAVINGS IN BANKS OR SAVINGS AND LOANS.)