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Related Flashcards
Related Topics
Cards In This Set
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Personal finance
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The process of planning your spending financing investinf so as to optomize your financial situation
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Personal finance plan
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Plan that specifies your financial goals and describes the spending financing and investing plans that are intended to achieve those goals
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Opportunity cost
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What you give up as a result of a decision
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Benifits from personal finance
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1- make own financial decisions2-all spending has opp cost3-judge advice of fin advisors4-become fin advisor
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Budget planning
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The process of forecasting future expenses and savings
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Assets=
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What you own
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Liabilities
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What you owe
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Net worth=
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Value of assets-liabilities
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Liquidity
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Access to funds to cover any short term cash deficiencies
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Money mangement
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Decisions regarding how much money to retain in a liquid form and how to allocate the funds among short term investment intruments
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Credit management
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Decisions regarding how much credit to obtain to support your spending and which sources of credit to use
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Insufficient liquidity
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No access to money to cover cash needs; have assets to cover cash needs but $ not accessable
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Effective liquidity
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Investing money to incur a return + easy access to needed cash
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Insurance planning
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Determine types and amt of insurance needed to protect assets
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Risk
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Uncertainty surrounding the potential return on an investment
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