1. FINANCIAL MANAGEMENT 2013-2014 Danielle, Breanna, Trinity, Sarah, Jada

2. Financial Education Terms Asset- puts money into your pocket Liability- takes money out of your pocket Interest- a fee for the use of money over time/money earned on a savings account. Profit- a financial gain/benefit. Passive Income- an income received on a regular basis with little effort required to maintain it. Credit- the ability to buy goods before payment, based on the trust that the payment will be made in the future. Budget- an estimate of income/expenditure for a set period of time.

3. Cash Flow Cash Flow- the total money being transported in and out of a business. Cash is received from assets and investments (ex: stocks, bonds, rental properties.) This is the cash-flow pattern of an asset: Income Expenses AssetsLiabilities

4. The difference between wealthy and rich class? The rich may have a lot of money, but if they quit their jobs, they will not survive. Wealthy people build a sustainable wall of assets so that they can survive on their assets.

5. Down Payment Down payment is a payment used when purchasing an expensive item, where the costumer pays a portion of the total amount and then continues to pay small portions overtime. Down payment is used when buying rental properties, where you pay your down payment of the property while receiving your positive cash flow. Here is an example of a rental property: Condo: 2BR/1BA Cost: $55,000 Mortgage: $50,000 Down pay: $5,000 Cash Flow: +$160

6. Credit Credit is used to purchase items before payment, and then pay due payment later. If you don’t make your payment when due, interest is added. Interest is a fee added to your payment that continues to grow at a certain rate. Credit score is used by lenders to determine if the consumers have bad debt, their interest rates and their credit limits.

7. Cash-flow patterns Income Salary Expenses Taxes Rent Food Transportation Clothes AssetsLiabilities Income Salary Expenses Taxes Mortgage payment Trans portation Food Clothing AssetsLiabilities Mortgage Consumer loan Credit cards Assets Real estate Stocks Bonds Notes Intellectual Property Liabilities Mortgage Consumer loans Credit cards Income Rental income Dividend Interest royalties Expenses Taxes Mortgage payment Poor DadMiddle-Class Dad Rich Dad

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