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Financial Literacy (Savings (Earns interest (Simple interest: multiply the…
Financial Literacy
Savings
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Earns interest
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Compound interest: Where inters\es is added to the principal every set amount of time. Could be compounded annually, every six months e.t.c.
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Saving goals help with saving more and spending less. There are three things to do when setting up a savings goal.
- Identify what you would really like to have in the future and how much it will cost
- Identify the amount you can put aside per week or month
- Identify how long it will take to reach your goal
Debt
Occurs when money is owed to another party and must be paid back within a certain timeframe with interest.
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Avoiding Scams
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There are scams that personally target people with the ultimate aim of taking their money has become more common in recent years. Some types of personal scams are;
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Investment scams
Scammers offer the person an opportunity to make money quickly. These scammers make make a unsolicited phone call or send an email. The scammer eventually asks for a payment or bank details.
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Investing
Definition: is the process of putting money in a business or commercial venture with the expectation of making a profit.
Investment Risk
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Investing in stock market is high risk while putting money in an Australian deposit-taking institution (bank).
Four Investment Options
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Property
Is purchasing a house, unit, factory, building or land with the aim that its value will increase, The property can also be rented out.
Equities
Are shares. A share is a unit of ownership in a company. Share investors become part-owners of the. company and hope that the value of their shares will rise. If the company makes a profit, it will make a payment called a dividend to shareholders.
Superannuation
Is a method of saving for retirement. Employers contribute to their employees' super funds. Personal contributions can also be made. For most people, superannuation is taxed at a lower rate than other non-super investments.
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