Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Financial economics wikipedia , lookup
Debtors Anonymous wikipedia , lookup
Federal takeover of Fannie Mae and Freddie Mac wikipedia , lookup
Syndicated loan wikipedia , lookup
Securitization wikipedia , lookup
Financial literacy wikipedia , lookup
Household debt wikipedia , lookup
Personal Financial Literacy What is PFL? What are some key terms we need to know? Who is Dave Ramsey? “The U.S. economy is the eighth wonder of the world. Americans’ ignorance of it is the ninth.” Arthur Levitt Former Chairman, New York Stock Exchange Today’s Teens… Fewer than half of teenagers polled understood how to budget College freshmen have an average debt of $1,500 on personal credit cards. The average credit card debt for college seniors is $2,864; a 48% increase from Freshmen Today’s Youth… The average debt of graduating college seniors including student loans is $40,000. Americans under age 25 are filing for bankruptcy faster than any other age group. Personal Finance What is personal finance? process of planning your spending, borrowing, saving & investing your money Just as mechanics, doctors, farmers & baseball players have vocabularies unique to their skill or trade, personal finance has concepts & terms that must be understood JARGON Vocabulary of Personal Finance Budget Opportunity costs things not purchased when money is spent on something else instead Income detailed list of expected revenues & expenditures All sources of money coming in (wages, gifts, winnings) Assets any good of value that you own (home, car, jewelry, TVs) Vocabulary of Personal Finance Liquid assets Liabilities things you owe – your debt (mortgage, car loan, credit card) Net worth things you own that can be easily converted into cash without significant loss (stocks, bonds, money market) equals your total assets minus your liabilities Equity difference between the market value & amount owed Liquidity Real estate taking a loan to pay of majority of coast of a purchase- a form of credit (get it now, pay for it later) Risk Land & homes or structures attached to the land Financing refers to amount of readily available cash you have access to- including liquid assets the potential of loss weighed against chance of gain Insurance purchased to provide reimbursement in the event of a financial loss (auto, homeowners, health, life) Components of good financial plan 1) Creating a budget- requires understanding of net worth, income, expenses & taxes 2) Managing liquidity- includes management of money & credit 3) Financing large purchases- how to best buy a home or car 4) Managing your risks- involves understanding and using insurance 5) Developing an investment plan- using your money to earn more $ - stocks, bonds, mutual funds 6) Accumulating wealth for retirementdetermining how much to set aside every year you’re working and investing it to spend after you retire 7) Communicating & keeping recordssharing your financial desires with family members and recording finances for tax & estate purposes If you write your financial goals down you will be more likely to achieve them Dave Ramsey’s financial terms Emergency fund Murphy’s Law Anything that can go wrong WILL Investment cash set aside for unforeseen expenses anything you put your $ in to get it to grow and become more $ (mutual funds) Stupid tax any purchase or financial decision one makes that you later realize that was a dumb choice that cost you Who is Dave Ramsey? Dave Ramsey is an author, financial adviser, radio & TV host 3rd most popular radio show in country- over 24 million listeners teaches Financial Peace University class on personal finance