Chapter 3 Review

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

• Give to those in need
• Spend it all on oursleves
• Impress the people around us
• Prove that we are successful

Which of these would count as a legitimate reason to use your emergency fund?

• You forgot to budget for your mom's birthday gift
• You have a fancy event coming p but you have already spend all of your clothing budget category
• The smartphone you've wanted just went on sale
• Your car battery died

While saving money isn’t easy at first, it will make your life a lot ______ in the future if you make it a habit now.

• Easier
• Harder
• Poorer
• Longer

The top three careers reported among millionaires were ________, _________, and ________.

• Pro athletes; bankers; CEOs
• Lawyers; surgeons; accountants
• Celebrities; developers; writers
• Accountants; engineers; teachers

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

• Inflation
• Rate of return
• The time value of money
• Principal interest

The amount of interest charged on a debt but not yet collected is called…

• Accrued interest
• Interest rate
• Same-as-cash
• Growth rate

90% of millionaires make over $100,000 a year.

• True
• False

In order to outpace inflation when investing, your investments need to have a lower rate of return than the rate of inflation

• True
• False

Once you’re out of school, have started your career, and have zero debt, your emergency fund should have __________.

• 3-6 months of income
• 3-6 months of living expenses
• $3,000
• $5,000

What is the goal of an emergency fund?

• To pay for large purchases
• To save for your children’s college expenses
• To have cash on hand for unexpected events
• To pay for health insurance