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Ch 12 - Investing & Retirement Flashcards | StudBud
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Ch 12 - Investing & Retirement
Ch 12 - Investing & Retirement
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1
Roth IRA, 401(k), 403(b), 457, and Simplified Employee Pension are all examples of
Retirement plans
Tax forms
Mutual funds
Investment bankers
2
The three components of compound growth are money, time and ______ .
Rate of return
Retirement
Investments
large paycheck
3
. ______is key when it comes to compound growth.
Time
Roth IRA
Attitude
Money
4
Never _____________ something you don't __________ .
Finance; think will appreciate in value
Diversify; enjoy
Buy; invest in
Invest in; understand
5
You can build a legacy you'll be proud of by . . .
Thinking of yourself first
. Sending your kids to trade schools
Giving your time and money to others
Keeping 10–12 months of living expenses inyour emergency fund
6
Choose the false statement about debt and retirement.
Debt holds you back! Invest sooner and more for a better retirement!
Getting into debt lets you to have everything you want now and when retired
When you have debt, a big portion of your paycheck is paying for your past.
Debt is stealing money from your paycheck and not allowing you to invest.
7
Never invest your money in ______ because it/they are extremely risky.
CDs
Single stocks
Mutual funds
Real estate
8
__________ is the cure for ________ .
Generosity; selfishness
Love; the income gaps in our society
Investing wisely; estate planning
Selfishness; thinking of others first
9
Before you invest, you should make sure a mutual fund has done well for 5-10 years.
True
False
10
Mutual funds are less risky and can outperform the stock market because . . .
They're fully liquid.
They guarantee a high rate of return.
They invest in several companies at once.
They're not diversified.
11
When you invest in a mutual fund, you are contributing to a pool of money that will be . . .
Invested in a mix of stocks, bonds and money market accounts
Taxed based on each individual investor'sannual salary
Given to hundreds of local charities in your area
Put into a separate savings account for yourchildren to inherit someday
12
It's okay to borrow money from your retirement account, but don't borrow money to invest in it.
True
False
13
What does "bull and bear" reference?
Mutual funds
The stock market
Your investments
The real estate market
14
Live like no one else now, so later you can live and _____like no one else.
Hoard your resources
Work hard
Be selfish
Give
15
When donating money, you should always . . .
Make short-term commitments to variouscharities.
Identify a cause that matters to you and research the charity thoroughly.
Give to as many organizations as possible toshare the love.
Assume the best and trust the charity will use your donation well.
16
____is the process of figuring out how much money you'll need in retirement and creating a plan to get there.
Retirement planning
Investment banking
Retirement accounting
Outrageous generosity
17
A security that represents part ownership of a company is called a(n) _____.
Annuity
Certificate of Deposit
Stock
Bond
18
You should put your Emergency Fund into a Money Market account because it is easy to get to the funds.
True
False
19
You should wait to be generous until you have money to give.
True
False
20
If you're over the age of ____, you need a will.
14
29
18
60
21
When you're retired, you'll still have to pay taxes.
True
False
22
When you invest, your goal is to earn a negative rate of return on investment.
True
False
23
It is important to be generous because generosity prevents selfishness and helps us consider the needs of someone else.
True
False
24
Usually, the more liquid an asset is (like cash in the bank), the less return you can expect
True
False
25
When riding the highs and lows of the stock market, remember . . .
The S&P isn't a reliable source to navigate the performance of stocks.
It will level out, so stick with it!
It's unpredictable and risky.You should pull your money out & steer clear.
You can't go wrong when investing moneyinto stocks.
26
What is NOT one of the keys to building wealth through investments?
Invest Consistently & Be Patient
Borrow from the equity in your home and invest in the stock market
Start Early
Research & choose investments with a good, long-term rate of return
27
Why might someone choose to diversify their investments?
To keep them from getting bored with oneform of investment.
To balance high-risk investments with moresteady and predictable ones.
There isn't a good enough reason todiversify your investments
To keep the risk as high as possible so thereward is equally high.
28
What is The Fifth Foundation?
Pay cash for college
Pay cash for your home
Build wealth and give
Save for retirement.
29
Be aware of any ______ you might receive, but don't bank on it as a key part of your retirement plan.
Tax refunds
Inheritance
Additional work
Bonus checks
30
You will still have expenses when you retire; some of them are food, clothing, transportation and medical bills.
True
False
31
Diversification reduces your ____by using a mix of investment types in your portfolio.
Mutual funds
Retirement funds
Risk
Income
32
Certificates of deposit and money market accounts are both examples of investments with ______risk and ______return.
High; high
Low; low
Low; high
High; low
33
Social Security benefits are meant to _____ your income.
Decrease D. Fully replace
Replace 40% of
Tax 100% of
Fully replace
34
What are some practical ways you can be generous today, before you're wealthy?
All of the Above
Tutor Someone
Assist a Senior Citizen
Donate Clothes
35
Investing your money earns you more money because of . . .
Mortgage payments
Short-term savings
Checking accounts
Compound growth
36
The first steps of retirement planning are
Dream about what you want your future to look like.
Think about what you want to do when you retire.
All of the Above
Decide what age you wish to retire.
37
When using a Roth plan, you invest your money after paying taxes, and the investment grows tax-free.
True
False
