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10 Cards in this Set
- Front
- Back
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Saving |
Depositing your money into a financial institution for safekeeping and to earn interest. (Short term) |
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Interest |
Amount paid to use somebody's money, usually a percentage of the amount deposited |
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Investing |
Is buying something with the expectation that it will make money for you (long term) |
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Inflation |
Decreases the spending power of each dollar you have by driving up prices of food, gas, clothes, etc over time. |
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Compound interest |
Earning interest on interest. |
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High risk |
High return |
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Low risk |
Low return |
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Risk tolerance |
Knowing how comfortable you are with the ups and downs of investing. Depends on When you need the money You financial goals Ability to live with bad outcomes |
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Diversification |
In reducing an investment risk by putting money in several different types of investments |
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Dollar cost averaging |
Investing a set amount of money each month or at regular intervals. It doesn't matter if the amount is big or small. What matter mist is that it's consistent |
