| A | B |
|---|
| Savings | short term goals or emergency needs. Low risk/low interest |
| Investing | longer term goals usually pays higher return with more risk |
| Bear Market | market going down |
| Bull Market | market going up |
| Rule of 72 | If you know the percentage of return, then divide by 72 which equals the number of years to double your money. |
| Time Value of Money | A dollar today is worth more than a dollar in the future. |
| Rule for saving | Pay Yourself First |
| IRA | Individual Retirement Account |
| Roth IRA | IRA that you get at a bank, after-tax money, and you do not pay taxes when you take money out |
| 401K | IRA that you get from a for profit business, pre-tax money, and you do pay taxes on return |
| 403B | IRA that you get from a non-profit or government job that uses pretax dollars and you pay taxes when taking your money out |
| Disbursement | Must be 59 1/2 or older; disabled, buying your first house, or beneficiary get the money from an IRA |
| Tax and Penalty | If you do not meet the requirements of a disbursement. |
| Reasons to invest | Education, retirement, financial security, education |
| Emergency savings | 3-6 months of expenses in a liquid account |
| Rule of investing | the higher the risk, the higher the return and the lower the risk then the lower the return |
| Securities and Exchange Commission | agency which approves corporations to sell stocks, oversees registration and financial records for investors; and handles complaints of misuse or abuse. |
| Portability | moves from job to job |
