2-1 Saving Basics

What do you need to know in order to tell if someone is actually wealthy?

• Assets (savings and wealth)

• Salary for the year

• How big their house is

• If they drive a new car

If you put $20 out of your paycheck into an account to help pay for books during college? Is this saving or investing?

• saving

• investing

Putting 5% of your paycheck into a 401 (k). Is this saving or investing?

• saving

• investing

If you buy shares of Apple, would that be saving or investing?

• saving

• investing

What happens when you put money into a savings account?

• It grows quickly due to simple interest.

• It will earn a high interest rate

• Inflation will gradually decrease the value

• It will never earn interest.

How much does Kal Penn reccommend you save?

• 5%

• 10%

• 20%

• 25%

Why is it so important to have an emergency fund?

• Because you need insurance

• prevents bankruptcy during unexpected emergencies

• it will earn a high interest rate

If you have a 529 account, what are you saving for?

• car

• emergency fund

• tuition

• retirement

Subtracting your total debt from your total assets gives you your ____________.

• adding money in your checking account

• adding up all your cash

• Wealth

• All the things you own.

How much of your paycheck should you save according to experts?

• 5%

• 45%

• 40%

• 20%