Of A Rich Kid
Matt Perego
Table Of Contents Chapter 1. Creating SMART Goals Chapter 2. The Federal Reserve Chapter 3. Ten Tips for a SUccessful Interview Chapter 4. Budgeting Chapter 5. Credit Union or Bank? Chapter 6. Debt Chapter 7. How to get a good credit score Chapter 8. Insurance Chapter 9: Car buying Chapter 10: Investing
Chapter 1: Creating SMART Goals S- Specific M- Measurable A- Attainable R- Realistic T- Time-bOund Creating a SMART goal is one of the most important thing to know. Without goals we would never achieve anything, and we must make our goals realistic so that we CAN achieve them. What is the point of making a goal that we can’t achieve? A good SMART goal will be Specific, Measurable, Attainable, Realistic, and Time-bound. Here is an example of a SMART goal: I will pay off the 25,000 dollars of student loan debt over the next 2 years by working at Johnny Mac’s.
Chapter 2: The Federal Reserve The Federal Reserve System (FRS) is the central bank of the United States. The Fed, as it is commonly known, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, DC, the Board of Governors and 12 regional Federal Reserve Banks in major cities throughout the United States.
Chapter 3: Ten Tips for a Successful Interview 1) Be prepared 2) Dress for the job 3) Be aware of your skills, abilities and experiences 4) Be ready to ask relevant questions 5) Take relevant material to the interview 6) Don't be late for the interview 7) Don't Panic 8) Don't lie about your skills and experience 9) Don't post too much on Facebook and other social networking sites 10) Don't be discouraged if you do not get the job
Chapter 4: Budgeting Creating a budget is one of the hardest thing to do in life, but it is also one of the most important things. The first step in creating a budget is to set your goals (ex. Do you want to retire early? Do you want to move to a bigger home? Do you want to go on a lot of vacations). After you set the goals you want for your money, the next step is to know penny for penny your net income. Once this is figured, then you start making a plan on how to divide the money for fixed expenses (ex. Mortgage, Phone bill, etc.) and variable expenses (ex. gasoline, heating and cooling, etc.). The most important thing when creating a budget is to PAY YOURSELF FIRST, which is the money you put aside AUTOMATICALLY for your retirement. The amount for this should be 10-12% of your net income.
Chapter 5: Credit Union or Bank?
Credit Union- Credit unions are not-forprofit financial cooperatives and are among the most stable institutions in America. They exist to serve the needs of their members (who are also owners) and offer the same types of banking products and services you would find at other financial institutions, including savings and checking accounts, loans, mortgages, Internet home banking and bill payment, and more. Bank- A commercial bank is a financial institution that provides services, such as accepting deposits, giving business loans and auto loans, mortgage lending, and basic investment products like savings accounts and certificates of deposit. The traditional commercial bank is a brick and mortar institution with tellers, safe deposit boxes, vaults and ATMs.
Chapter 5: Credit Union or Bank?
Because credit union’s are nonprofit, their interest rates are low and there are no fees. Banks on the other hand are run to make a profit which means their interest rates and fees would be higher than a credit union. Also, the customer service in a credit union is excellent because they treat you like a valued client or customer. Banks are not as good with customer service as credit unions. Banks usually treat customers like a piece of meat, rather than an important client. Overall, a credit union is better than a bank.
Chapter 6: Debt Debt- is an amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest. Sometimes debt is hard to get rid of, but budgeting your money can is one small way to help.
Chapter 7: How to get a good credit score Many people in the US wonder about how to get a good credit score? A credit score is a statistically derived numeric expression of a person's credit worthiness that is used by lenders to assess the likelihood that a person will repay his or her debts. The score is a number ranging from 300 to 850. The higher number the better. One big thing for having a good credit score is to only use 30 percent or less of your available credit. Available credit the amount of money of all of the credit you have on all of your credit cards. For example, let’s say I have one credit card that has a credit limit of $1,000. If I want a good credit score, I will only use $300 or less.
Chapter 8: Insurance Insurance- a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.. Insurance is like an umbrella; you never know when you need it, but it always comes in handy on a rainy day. There are four types of insurance coverage that everyone needs: home, auto, life, and health insurance. Without insurance a person is liable for any damage to themselves, their property, and damage they cause to someone else or their property.
Chapter 9: Car Buying Car buying is always fun, but many people buy cars impulsively rather than taking their time and doing research on the car they want. The first rule when buying a car is to know your spending limit.. If you budget $15,000 for a car, do not go over and spend $20,000 because that can lead to debt. Before you start shopping for a car know what you want to get out of it.. For example, don’t buy a Corvette when you need a mini-van that seats six. Also, another tip for car buying is to buy used cars with few miles on them. A 2014 Ford Mustang with 20,000 miles is worth $18,000 and a new 2016 Ford Mustang is worth $28,000. That’s a $10,000 difference!
Chapter 10: Investing Investing is actually pretty simple; you're basically putting your money to work for you so that you don't have to take a second job, or work overtime hours to increase your earning potential. There are many different ways to make an investment, such as stocks, bonds, mutual funds or real estate, and they don't always require a large sum of money to start. You don't need to be a financial expert to invest, but you do need to learn some basic terminology so that you are better equipped to make informed decisions. Learn the differences between stocks, bonds, mutual funds and certificates of deposit (CDs). You should also learn optimization, diversification and market efficiency. Next, you need to set goals for what you want to get out of investing. After that you get to pick the stocks to invest in. If you have a
Chapter 10: Investing conservative investment style, your portfolio should consist mainly of lowrisk, income-producing securities such as federal bonds and money market funds. Key concepts here are asset allocation and diversification.