Building Wealth. Assets-Liabilities = Net Worth Assets—anything an individual or business owns that has commercial or exchange value Liabilities—Money an individual or organization owes; same as debt Net Worth—The difference between the total assets and total liabilities of an individual.
Assets-Liabilities = Net Worth
Assets—anything an individual or business owns that has commercial or exchange value
Liabilities—Money an individual or organization owes; same as debt
Net Worth—The difference between the total assets and total liabilities of an individual
BOTTOM LINE: Your net worth is your wealth
Choose one item from the following list and answer these three questions:
1. A specific description of your goal ($,item,etc.)
2. Time frame for achieving your goal
3. Financial resources required to achieve your goal (savings and income)
Buy a new vehicle Rent an apartment
Go to college Take a trip
Buy a used vehicle Buy a house
Go to the prom Buy a new Big Screen TV
INTEREST—is a fee for the use of money over time.
Simple Interest—the interest payment is computed as a percentage of the original deposit amount or principal
Compound Interest—interest that is paid on both the principal and also on any interest from past years
Would you rather receive $100,000 today or 1 cent with a promise that if you hold all of the money that you are given, the amount will be doubled each day for a month (30 days)?
True or False?
For the following question, include ideas of risk and return in your answer:
If you were to receive $10,000, how would you invest the money?
People come to banks looking for a safe place to keep their money (Savers)
What factors do banks consider before lending $?
List 7 markets that you participated in over the last month. (EX: Wal-Mart.)
Thinking about these markets, write down 3 answers to the following: “We couldn’t have markets unless we had _________ “
Just as there is a market for music (iTunes), jeans (department stores) or food (Wendy’s) there is also a market for stocks.
a.) If the company does well, they can issue their stockholders a dividend
b.) This is a percentage of the company’s profits
A bull market means that people are optimistic and believe the market will increase.
A bear market means that people are pessimistic and believe the market will decrease.
The RISKIER the Investment
The HIGHER the Return
If credit card companies can get you in debt early, they may be able to keep you in debt for life.
1. Character—refers to the financial history of the borrower..Do you pay your bills on time? Have you had credit before?
2. Capacity—ability to pay back the loan..Do you have a job or another income source?
3. Collateral—an item of value pledged against the debt; car or house. With credit cards, the collateral could be the money in your savings. If it is a car loan, the car could be the collateral
4. Conditions—how you plan to use the money, What is the purpose of the loan? Vehicle? Education? Business? Home?