Chapter 3 Test Review

Question 1

The top three careers reported among millionaires were

Accepted Answer

Accountants; engineers; teachers

Question 2

Why do stores rarely advertise the full price of big purchases like smartphones?

Accepted Answer

By only showing you the monthly pymt they make the product seem affordable

Question 3

If people saved the equivalent of a car payment each month for a year, they could have enough $$ to buy a car with cash.

Accepted Answer

True

Question 4

What is the Third Foundation

Accepted Answer

Pay cash for your car

Question 5

The purpose of an emergency fund is to...

Accepted Answer

Be able to cover unexpected exp and protect you from debt

Question 6

90% of millionaires make over $100,000 a year.

Accepted Answer

False

Question 7

You should budget in this order: giving, saving, spending.

Accepted Answer

True

Question 8

Which two habits are the most important for building wealth and becoming a millionaire?

Accepted Answer

Consistently investing money and patienct to give it time to grow

Question 9

While saving money isn't easy at first, it will make your life a lot______ in the future if you make it a habit.

Accepted Answer

Easier

Question 10

_______ is a millionaire's best friend.

Accepted Answer

Compound growth

Question 11

The first step you should take when you want to make a large purchase is . . .

Accepted Answer

DECIDE HOW MUCH YOU'LL NEED TO SAVE AND THE TIME FRAME YOU WANT TO SAVE IT

Question 12

Once you have a $500 emergency fund, you should . . .

Accepted Answer

SAVE IT UNTIL YOU HAVE AN EMERGENCY

Question 13

Once you're out of school, started a career, and have zero debt, your emergency fund should have.....

Accepted Answer

3 to 6 months of living expenses

Question 14

Compound interest is earned at a fixed rate, while ______ is an average based on an investments past performance

Accepted Answer

compound growth

Question 15

Why do some accounts, like savings accounts at your local bank, earn interest?

Accepted Answer

Because the bank pays you to use your money

Question 16

The only place you should keep your emergency fund money is..

Accepted Answer

A SAVINGS ACCT OR MONEY MARKET ACCOUNT

Question 17

Which of these would count as a legitimate reason to use your emergency fund

Accepted Answer

Your car battery died

Question 18

In order to outpace inflation, your investments need to have a lower rate of return than the rate of inflation.

Accepted Answer

False

Question 19

Debt is a tool to use to make you wealthy.

Accepted Answer

False

Question 20

The amount of interest charged on a debt but not yet collected is called...

Accepted Answer

Accrued Interest

Question 21

You'll have less freedom with your money if you . . .

Accepted Answer

ARE PAYING FOR THINGS IN YOUR PAST

Question 22

The best way to build wealth is to start investing early. You should start investing money . . .

Accepted Answer

ONCE YOU'RE OUT OF COLLEGE, LIVING DEBT-FREE AND HAVE 6 MO EMERGENCY FUND

Question 23

One of the main reasons we build wealth is so that we can . . .

Accepted Answer

Give to those in need

Question 24

45% of Americans have less than $1,000 saved for a(n)_____________.

Accepted Answer

Emergency

Question 25

It's not IF an emergency will happen, but _______.

Accepted Answer

WHEN

Question 26

What is the goal of an emergency fund?

Accepted Answer

To have cash on hand for unexpected events

Question 27

The interest rate on a savings account determines . . .

Accepted Answer

How quickly your money will grow over time

Question 28

Which principle says that a certain amount of money today is worth more than the same amount in the future?

Accepted Answer

The time value of money

Question 29

The main reasons for saving your hard-earned money are...

Accepted Answer

Emergencies, large purchases and wealth building

Question 30

If you really want to save money, you've got to . .

Accepted Answer

LIVE ON LESS THAN YOU MAKE

Chapter 3 Test Review

Questions 30

Chapter 3 Test Review

Questions 30