Chapter 3 Quiz #2 PF

Which two habits are the most important for building wealth and becoming a millionaire?

• Working a high-paying job, relying on a trust fund

• Paying off your credit card to develop a credit score, putting extra money into a retirement account

• Investing into the right stocks and annuities, using a private CPA

• Consistently investing money, patience to give it time to grow

Which principle says that a certain amount of money today is worth more than the same amount in the future?

• Inflation

• Rate of return

• The time value of money

• Principal interest

the average rate of growth for an investment over time, often expressed as an annual figure

• compound growth

• compound interest

• accrued interest

• rate of return

the initial amount of money invested or borrowed

• principal

• time value money

• inflation

• rate of return

the measure of an investment's profit of loss, usually expressed as a percentage of an initial investment

• accrued interest

• time value money

• inflation

• rate of return

Get out and stay out of debt

• The Fourth Foundation

• The Second Foundation

• The Third Foundation

• The Fifth Foundation

The main reasons for saving your hard-earned money are . . .

• Emergencies, large purchases, and wealth

  building

• Paying for your dream home, buying your

  dream car, and going on your dream vacation

• Buying gifts, donating to charities, and

  building up a college fund for your kids

• Investing, indulging, and influencing

Why is a zero-percent interest deal a bad idea?

• The compound growth originated from the interest is very low.

• You will have to pay back accrued interest because of late or no payments.

• Very few people qualify for this deal,

• You have to pay a lot of interest up front, which is expensive.

One of the main reasons we build wealth is so that we can . . .

• Give to those in need

• Spend it all on ourselves

• Impress the people around us

• Prove that we are successful

Why do stores rarely advertise the full price of big purchases like smartphones?

• They are trying to keep their prices competitive.

• Hiding the full price allows stores to change their pricing as the market fluctuates.

• By showing you only the monthly payment, they make the product seem affordable.

• They are trying to cheat you.