Exam (elaborations)
Honestly tired of foolproof at this point- Questions and Answers Fully Solved
- Course
- Institution
Honestly tired of foolproof at this point-
[Show more]
Content preview
Honestly tired of foolproof at this point-"Saving" usually means sticking your money some place where it is safe. - answer
Dropping change in a jar is saving.
Putting money in a savings account at a credit union or a bank is saving.
Saving could be something you do for short-term needs or long-term needs.
Many savings plans are "insured" to make sure you don't lose your money.
You won't get rich just "saving" money.
"Investing" means putting your money to work for you for a longer period of time. -
answer Buying stocks or bonds, or owning part of a business are examples of investing.
Investing usually has risk associated with it: You could lose all or part of your money.
Investing the right way means your money works harder for you - while you're sleeping.
- answer You will not succeed as a saver or investor unless you have this "thing"... In
fact, you'll have less financial options throughout your entire life if you don't have it.
You're going to be a prisoner to the hours you work without it. Don't expect any income
while you sleep if you don't have it.
Opportunity cost: Sacrificing something now for something more valuable in the future. -
answerYou skip going to the movies for a year to save up enough money for a down
payment on a car.
You decide not to buy the amazing sound system and instead buy a share of stock.
The "opportunity cost" is the choice you don't pick. - answerYou give up the opportunity
of seeing all those movies. That's an opportunity cost.
You give up the opportunity of hearing tunes on a new sound system. That's an
opportunity cost.
A Guaranteed Way To Fail As An Investor:
This guaranteed failure is all about bad "opportunity cost" decisions: -
answerUnnecessary debt can destroy your investment opportunities.
When you have unnecessary debt, you're usually paying more in interest on that debt
than you can make on an investment.
Do you get that? - answerYou'll be very lucky to earn 10% interest on many
investments.
You'll earn a lot less than 10% on almost every interest-paying savings account you can
find.
Some credit cards charge 20-25% interest!
, A store charge account can cost you 20% in interest.
A "Payday" loan can cost you 400% in interest!
Every dime you throw away in unnecessary interest payments is money you could have
invested.
- answerCollision Damage Insurance:
If you have a vehicle that is worth a lot more than your deductible, collision damage
insurance is very important.
Here's how to determine if you need collision damage insurance on your own vehicle:
If you are financing a vehicle, collision damage insurance is required.
The company providing the loan will require it to protect the "collateral" for the loan,
which is your vehicle.
If you are paying cash for a car, collision damage is not required, but can be really
important.
Does collision damage insurance make sense for you? Let's see...
You buy a $10,000 car...
Let's assume your car has $6000 in damages from an accident.
Even if your collision damage deductible if $1500, your insurance will still pay you
$4500.
- answerWhat If My Vehicle Is Not Worth Much?
If your vehicle isn't worth much, you may not need collision damage insurance.
Let's say you want to buy a car from a family member that is only worth $1500.
You can buy collision damage insurance with a $1000 deductible.
The maximum amount your insurance would pay to repair your car in any accident is
only $500. (The $1000 deductible subtracted from your car's value of $1500.)
You would probably have to pay more than $500 to buy the insurance.
The collision damage insurance in this example is worthless. You're not that dumb.
- answerNext Up, Comprehensive Insurance:
"Comprehensive" insurance is another type of insurance you may need. It is usually
sold together with collision damage insurance.
Insurance agents usually lump both "collision damage" and "physical damage"
insurance together. Together they are referred to as "comprehensive" insurance, since
collision damage insurance and comprehensive insurance both deal with physical
damage to a vehicle.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller julianah420. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
72042 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now
