Personal Finance Unit

What can do you with money?

Save, Spend, and Invest, and Donate


an estimate of income and expenditure for a set period of time.

Federal Reserve System

This is the central bank for the US, ( Bank to the Banks )

Commercial Banks

These are private corporations that offer most financial services: checking, saving, loans, investments ect

What does FDIC stand for and what does it do?

Federal Deposit Insurance Corporation, it insures you're money up to 250,000

Credit Unions

Nonprofit and serve their members, not shareholders and you can only become a member if you live in a certain area or have a certain job / have lower interest rates

Savings and Loan Companies

They don't require you to deposit money just make an agreement with you to pay for something you cant afford


the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.


How accessible the asset is. Cash has high liquidity because its in your pocket and you can use it now, however low investments because you have to sell it first before u can use the money


The act of spending with the expectation of returning a profit


The act of spreading out your investments in multiple avenues, so that the risk of losing your money is less likely


The ways that your money and assets are invested, the most diverse the better


These are shares if a business that can either increase or decrease in value

Mutual Funds

Some investments companies will pool money from many individuals and invest them in stocks, bonds, and other financial assets. This is one of the best ways to invest, because they have a pretty low risk and a great payout.


These are certificates of a company or government to expand or complete a project. These are very low risk but also low reward.

Property / Real Estate

This is a pretty good investment, because real estate almost never decreases in value. However, real estate requires a large amount of upfront capital.

Rule of 72

72 divided by interest date


The amount of money borrowed


State of owning money to someone or something

2 parts to debt are

Principal and Interest Rate


The amount you must pay in addition to the principal, represented as a percentage


Loans that transfer real estate, usually in the form of houses from a creditor

Credit Card Debt



is a share of a company The more stock you hold, the more you get back in profits or lose on defaults.


are profits that a company gives its stockholders


They are responsible to shareholders and can be fired if they do not perform well


Initial Price Offering

Full service brokerage

Will take your money and invest as well as they can, hoping to get a profit

Discount brokerage

Is a company that charges a small fee, but you have to be the one deciding trades at any moment

Stock Index

A measure of the stock market ( YOU DO NOT BUY STOCK ON AN INDEX )

3 most popular indices

Dow Jones Industrial Average, the Nasdaq, and the S&P 500

S & P 500

Best index for telling the overall health of the economy

Stock exchanges

Places you actually buy stocks from


New York Stock Exchange is the largest and most important

Blue Chip Stocks

large companies with strong brands, financially sound businesses and consistent earnings and cash flows ( impossible for them to go bankrupt )