Wealth Building Vocab

Positive Net Worth is:

• When assets exceed liabilities

• When liabilities exceed assets

• When assets and liabilities are equal

• When there are no assets or liabilities

Negative Net Worth is defined as:

• When liabilities exceed assets

• When assets exceed liabilities

• When income is greater than expenses

• When expenses are greater than income

What is Net Income?

• The total revenue of a company

• The profit after all expenses and taxes

• The total expenses of a company

• The gross income before taxes

A Stock Market Index is:

• A measure of the performance of a group of stocks

• A type of stock

• A financial statement

• A trading platform

What is a Portfolio?

• A collection of financial investments

• A type of insurance policy

• A legal document

• A type of bank account

An Individual Retirement Arrangement (IRA) is:

• A type of savings account with tax advantages for retirement savings

• A health insurance plan

• A type of mortgage

• A credit card

Investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. Which of the following best describes this statement?

• Spending money on luxury items

• Saving money in a bank account

• Allocating resources with the expectation of generating income or profit

• Donating money to charity

Return on Investment (ROI) is:

• A measure of the profitability of an investment

• A type of stock market index

• A government bond

• A financial statement

What is a Liquid Asset?

• An asset that can be easily converted into cash

• A type of fixed asset

• An asset that is difficult to sell

• A long-term investment

Retirement Planning is the process of:

• Saving and investing for future financial security

• Planning a vacation after retirement

• Choosing a retirement home

• Deciding on a retirement age