Investing in 2024: A Beginner’s Guide Quiz

What is the first step recommended before starting to invest?

• Pay off all consumer debt and save an emergency fund

• Open a Roth IRA

• Invest in mutual funds

• Start a 401(k)

What percentage of your gross income is recommended to invest for retirement?

• 20%

• 15%

• 10%

• 25%

Which type of account should you start with if your employer offers a match?

• Traditional IRA

• 529 Plan

• Roth IRA

• 401(k)

What is the main advantage of a 529 Savings Plan?

• Guaranteed returns

• No risk of loss

• Tax-advantaged savings for education

• Unlimited contributions

What is the primary benefit of diversification in investing?

• Maximizes returns

• Ensures guaranteed profits

• Reduces risk

• Increases tax benefits

Which type of mutual fund is recommended for long-term, consistent growth?

• Bond funds

• Growth stock mutual funds

• Real estate funds

• Money market funds

What is the recommended order for opening investment accounts?

• Roth IRA, 401(k), Traditional IRA

• 401(k), Roth IRA, Traditional IRA

• Traditional IRA, Roth IRA, 401(k)

• Roth IRA, Traditional IRA, 401(k)

What is the contribution limit for an ESA per child per year?

• $3,000

• $4,000

• $2,000

• $1,000

What is the first of Ramsey’s 7 Baby Steps?

• Pay off all debt

• Invest 15% of income

• Save for kids’ college fund

• Save $1,000 for a starter emergency fund

What is the main focus of Baby Step 4?

• Build wealth and give generously

• Save for your kids’ college fund

• Invest 15% of your household income in retirement

• Pay off your home early