1. Personal Finance

2. Saving Disposable Income Discretionary Income
All income after you pay taxes
Discretionary Income
The money you use to buy stuff you don’t need
Cable, Fine Dining, Entertainment
Financial Planners suggest you save at least 6 months of worth of your current salary (rainy day fund)
Checking and banking accounts allow you access to your money at any time and offer very small interest rates
Most banking accounts carry substantial fees
Get a checking acct for your daily spending
Get a savings acct for your rainy day fund (this money is harder to get to)

3. Debt Credit-Money you don’t have that someone lends you
Collateral-Something you promise to give your lender if you don’t repay
Credit Rating-Score used to determine how likely you are to pay someone back
Debt-When you owe people money
Bankruptcy-When you owe so much money that you can’t repay and the government forgives most of your debt (after selling off your assets)
Principal-The original amount of the loan
Interest-Money you pay on top of the principal to encourage people to loan you money

4. Good Debt?
Mortgage-Loan given for a house when the house itself is used as collateral
Usually considered good debt because land and house values almost always increase over time
Student Loans- Loans given to college students to pay for college
Cannot be forgiven if you declare bankruptcy
Usually considered good debt because a college degree will make you money in the future
21,000 (Drop Out) 840K LT
30,000 (High School Diploma) 88,000 (Cost of Bachelors Degree)
37,000 (Some College)
45,000 (Bachelors Degree) 2 Mil LT 800K Difference for only 88K
65,000 (Masters Degree)

5. Investing (Spending Money to Make Money)
Stocks-Little pieces of a company that can be bought and sold
Bonds-Little loans that you give a company or government
Stock Market-The place where you buy and sell stocks
Mutual Funds-A basket of stocks (picked by a pro)that you can buy a share of
Dow Jones-A list of stock prices that is used to gauge how the market is doing
Bond Market-Place where bonds are bought and sold
Real Estate-Houses, buildings etc.
Precious Metals-Gold, Silver etc.
Businesses-Invest in your own business or someone else's (very risky)
Diversify-Don’t put all your eggs in one basket

6. Investing Accounts
401k-Employer sponsored retirement account that has tax advantages.
The money you put in is not taxed until you retire
IRA-Individual Retirement Account-Money you put in is not taxed until you retire
Roth IRA-Money you put in is not taxed when you take it out
Roth 401K-Money you put in is not taxed when you take out
Brokerage Account-like a savings account but instead of currency you put your stocks and bonds in there