Financial Literacy Fundamentals

What is the first step towards achieving financial literacy?

• Investing in the stock market

• Understanding personal finances and debt

• Buying a house

• Starting a business

How can one increase their value to potential employers?

• Avoiding internships and volunteer positions

• Making strategic career choices based on comparative advantage

• Focusing solely on academic achievements

• By working less hours

What rule is suggested for budgeting monthly income?

• 60-30-10 rule

• 80-20 rule

• 50-30-20 rule

• 70-20-10 rule

Why is saving regularly important, even for small amounts?

• Only for large future purchases

• Because it's required by law

• To prepare for unexpected expenses

• To spend more on entertainment

What is the safest way to invest in the stock market for beginners?

• Buying individual stocks

• Investing all money in one sector

• Purchasing an index fund or ETF

• Speculating on stock prices

What did Albert Einstein reportedly say about compound interest?

• Only useful for mathematicians

• The most powerful force in the universe

• It's the least important financial tool

• Not applicable in modern finance

How does compound interest work compared to simple interest?

• It applies the same rate to the initial amount only

• It decreases over time

• It's only beneficial in short-term investments

• It applies the interest rate to the growing amount

What is a key difference between using credit for assets vs. consumption?

• Credit should only be used for luxury items

• Using credit for assets can build value, while consumption does not

• There's no difference in the long term

• Consumption always leads to financial growth

What is one of the major emotional impacts of excessive debt?

• Increased happiness

• Improved financial literacy

• Loss of hope and increased anxiety

• Decreased stress

Why is talking about finances and financial planning important?

• It has no real benefit

• To improve understanding and share knowledge

• To avoid sounding uninformed

• It's a social taboo