Compound interest is difficult to calculate, so those who use it earn higher profits

Compound interest means you have a fund manager compounding your returns without a fee

Compound interest lets you earn interest on your savings and on the interest already earned

Compound interest directly affects the fees you are charged

Staying calm during a market downturn

Buying low and selling high

Exiting the market because others are

Investing in a diversified portfolio

His purchasing power will DECREASE because the interest rate is lower than the historical rate of inflation

His purchasing power will INCREASE because the interest rate is higher than the historical rate of inflation

His purchasing power will INCREASE because the interest will compound faster than the historical rate of inflation

His purchasing power will remain the SAME because the interest rate is the same as the historical rate of inflation

A bond pays dividends while a bond fund pays interest

A bond guarantees a higher return than a bond fund

A bond is issued by a company while bond funds only invest in government bonds

A bond is less diversified than a bond fund

ETFs are traded once a day after the market closes

An ETF is a single stock you can buy

Actively managed ETFs have very low fees

ETF prices can change throughout the day as they are traded on the market

Loss of $800

Profit of $350

Loss of $450

Profit of $800

Investors expect lower returns from high risk assets

Investors expect higher returns from low risk assets

Investors expect higher returns from high risk assets

Investors expect zero return from low risk assets

Diversification guarantees you won’t lose money

Fund managers charge lower fees for diversification

Diversification helps reduce risk

Diversification guarantees high returns

It helps reduce your risk

Only expert investors use it

Earnings are untaxed

Only robo-advisors offer it

A bond is a loan to an organization, a stock is partial ownership in a company

Bonds are riskier than stocks and can earn higher returns

Bonds are issued by startups, stocks by established companies

Bonds are for high returns, stocks for stable income

Has lower fees than an index fund

Is managed by a fund manager who charges a fee

Always performs better than an index fund

Is a mix of stocks and bonds

They sell the stock for less than they bought it for

They get dividends or sell the stock for more than they bought it for

The stock loses value but the market goes up

They sell the stock for the same price they bought it for

An online portal to set up appointments with a fund manager

An account to pay taxes on investment earnings

An account to buy and sell stocks, bonds, and funds

A special 401(k) plan offered by some employers

It helps you decide if you want to join your employer’s 401(k) match program

People with low risk tolerance shouldn’t invest at all

High risk tolerance means you may pay lower fees even if your portfolio loses value

You should choose investments that match the level of risk you are comfortable with

Opt out of the 401(k) plan and use the money elsewhere

Contribute $75/mo to her 401(k) and $75/mo to an IRA

Save $150/mo in a bank account until she can max out her 401(k), then invest

Contribute the full $150/mo to the 401(k) to get the full company match

You are charged higher fees than if a human fund manager adjusted your portfolio

You may not be able to get advice from a human financial advisor when you want it

You don’t have any input as to how your portfolio is invested

You’ll be put on a waitlist to use the robo-adviser since there are only a handful of them to choose from

A TDF is actively managed by a fund manager but comes with low fees

A TDF buys a single stock and bond so that beginner investors can practice day trading

A TDF is insured by the federal government, so your money is protected even if the fund performs poorly

A TDF will automatically adjust your asset allocation based on the retirement year you have chosen

Do I want a guaranteed return of 6% or 8%?

Do I want to pay taxes now or later?

Can I use my employer’s matching contribution?

Should I take more or less risk?

Invest in a low cost index fund

Estimate how much she will need for retirement to determine how much she needs to invest each month

Pick individual stocks to see if she can beat the market

Invest in a diversified portfolio

Social Security is a type of retirement savings plan that you can open through a brokerage firm

Social Security is a government program that pools contributions from current workers to fund retirement support benefits to those who are eligible

Social Security is a type of retirement savings plan offered by some employers

Social security is a government mandate that requires employers to offer their employees a 401(k) or pension plan

You may receive dividends if paid and own part of the company

You must receive dividends and can choose management team members

You can choose management team members and vote for the Board of Directors

You own part of the company and receive coupon payments

They are a mix of a few individual stocks for diversification

They offer low-cost, diversified investments that match the returns of an index like the S&P 500

They are actively managed by a fund manager

They are managed by robo-advisors that guarantee higher returns

The price of your bond will increase

The demand for your bond will decrease

The price of your bond will stay the same

The interest rate for your bond will fall to 3%

ActiveFund20: It had an overall return of 8.0% while PassiveFund500 had an overall return of 6.6%

PassiveFund500: It had an overall return of 6.6% while ActiveFund20 had an overall return of 8%

ActiveFund20: It had an overall return of 7.0% while PassiveFund500 had an overall return of 6.5%

PassiveFund500: It had an overall return of 6.4% while ActiveFund20 had an overall return of 6.0%