❓ Quiz: Introduction to Investing
4 questions
1. How can I explain the concept of risk in investing to my child?
The process of creating a plan on how to spend your money.
An amount of money that a person aims to accumulate for a specific purpose.
The act of donating a portion of one’s money to help others.
You can describe risk as the possibility of losing some or all of their investment, similar to a game where sometimes you win and sometimes you lose. Use relatable analogies, like comparing it to trying new foods—some may taste great, while others you might not like at all! This can help frame risk in an approachable way.
2. Investment?
Individual Retirement Account; a savings account with tax advantages to help you save for retirement.
The ability to understand and share the feelings of another.
The amount depends on your financial goals and the age of your child. For example, if you want to save $100,000 for a child who is currently 5 years old, you might need to save around $350 monthly in a 529 plan with a 6% return. Use online calculators to adjust based on your circumstances.
Allocating money to assets in hopes of generating profit.
3. Compound Interest?
Earning interest on previous interest.
Individual Retirement Account; a savings account with tax advantages to help you save for retirement.
A tax-advantaged savings plan designed to encourage saving for future education expenses.
A type of mutual fund that aims to replicate the performance of a specific index.
4. Index Fund?
A type of mutual fund that aims to replicate the performance of a specific index.
An organization set up to provide help and raise money for those in need.
The amount depends on your financial goals and the age of your child. For example, if you want to save $100,000 for a child who is currently 5 years old, you might need to save around $350 monthly in a 529 plan with a 6% return. Use online calculators to adjust based on your circumstances.
The ability to understand and share the feelings of another.
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