MoneySkills Notes Modules #1-20 (Midterm Exam Review)

Module 1: The Plans We Have for Our Lives

Notes Courtesy of Kevin H.

-Life time plans

-financial plans

-mortgage

-how to spend your money wisely

-what to plan for when you are older

Notes Courtesy of Grace J. 

- According to information gathered by the U.S. Census, those with a 4-year college degree can expect to make $2.1 million over their lifetime, nearly twice the $1.2 million made by those who have only a high school diploma. Those with graduate degrees make even more, on average.

- By leaving a position as a school teacher, she would cut her family's income in half for the years raising her kid, being a stay at home mom longer. The loss of money would take away from retirement savings.

- It is important to have some savings if you have children, and it is difficult to save once you have them.

- Graduating from college will not cause you financial problems

- If someone, people in high school, know what they want to be/do before they get out, they can already start thinking of a plan for savings and regulate their spending.

- People who have paid off their debt and are married with two earners will be better off with money. They won't run out as quickly.

- If you wanted to buy a house that cost $150000 with a 5% down payment, that would be 150000 x .05.

- If you put down more money on something, the amount borrowed will be less and then you could get a better interest rate. Both would make payments smaller.

- Company's advertise “gross pay”, not “take home pay”. Take home pay is no more than 2/3 of the gross pay after taxes.

- You can't keep spending more money than you make. That's a good way to become bankrupt. Borrowing money, you have to pay back plus the interest rate.

Dylan A.

Module 2: Andrew's Simulation

Notes Courtesy of Kaitlin W.

Stay at home parent will mean less income

Full time school is more expensive than part time schooling

Two can’t live as one because you both have separate costs for food and transportation and other things

Notes Courtesy of Zack B.
Some have very complex finances while others have less complicated needs. It is a misconception to think financial planning is only for those of significant means. In fact, most will benefit from the planning process. An annual financial checkup should be considered to be as necessary as the medical checkup is to one’s health.

Financial planning is an investment for each of us and should yield reasonable economic benefit. Recognizing that individual needs vary, we offer varying levels of service, which translate into the time, and the effort required of us to development your plan and provide follow-up assistance.

Notes Courtesy of Gabe P.

·        You can have a family, education, home, just not at one time.

·        Going to school full time is more expensive than going part time.

·        It’s easy to plan your fanatical life till retirement.

·        Children cost a lot.

·        Income drops when you have children because a parent has to stay home with them.

·        Most people rarely get “larger than inflation” raises.

·        Expenses go up when in Grad school. 

·        When married, expenses double, but so does the income.

    Expenses are highest when children are in.

Module 3: Earned Income and Skill Demand

Notes Courtesy of Zack B.
The amount of money you earn at your job, which could be an hourly rate pay, gross pay, or even tips, is called your earned income. Family income both depends on both the numbers of family members who work and the amount of money that each is paid. There are other sources of income like unearned income this could be profits we earned for owning a business, the money we earn from collecting rents on property we own etc. Skill demand is specific skills required to obtain a certain job. For example you may need have a degree in business management in order to become an executive

Notes Courtesy of Jordan B.

-Family income depends on the number of family members who work and the amount of money that each is paid.

- There are huge differences in the amount of money people are paid for there work in the United States.

-What accounts for differences in the income that we receive from our jobs?

• The amount and type of education that we have.
• The demand for people with certain skills.
• The supply of people with certain skills.
• Whether or not a job is unionized and the power of the union.
• The region of the country in which we work.

-People with less education not only make less money, but also tend to have higher unemployment than those with more education.

-When times are tough and employers have to lay people off, they always want to hold onto those employees with the best skills since they will need these workers the most when times improve.

-Education is an expensive investment that we might not make if it didn't help us earn more money.

Notes Courtesy of Mike C.

• Income that we earn when someone pays us in the form of hourly wages, regular salaries or tips is known as earned income.
• Family income depends on both the number of family members who work and the amount of money that each is paid.
• These may include the profits we earn from owning a business, the money we make from collecting rents on property we own, the income we receive in the form of interest and dividends from our investments or the non-salary payments we receive from the government.
• In a similar way, any education to learn or improve job skills is called "human capital" because it helps people do their jobs better and as a result, earn more money.
• The cost of education consists of two things: First is the actual out-of-pocket cost that we must pay for tuition, books, fees and supplies. In economic terms, this is known as the explicit cost.
• Most salaries are determined by the market, which means that people with skills that are in high demand will receive more money than people with skills that are in lower demand.

Module 4: Earned Income and Skill Supply
Notes Courtesy of Jasleen A.

-The amount that you will be paid for a skill is based on the supply of workers with that same skill and the demand for that skill.

- Jobs can be seasonal or regular. Regular jobs are more desirable than those of seasonal jobs, lifetime government jobs are better to a lot of people who will take a lower guaranteed salary as a civil servant than as an employer of a business that could lay them off if sales were not good.

- Labor Union: Group of workers with similar skills who join together to try to improve their wages, benefits, and working conditions.

-Unionized and non-unionized workers with the same skills doing the same type of work, unionized workers will tend to make more per hour than non-unionized workers because a large group of workers can bargain more effectively for benefits than individual workers.

-Union workers are usually paid very little and depends on the demand for the skills they have.

-The amount of money you earn also depends on where you choose to live. “Metro” areas tend to earn more than those who live in “rural” areas because of the demand with people with certain skills in the city.

Notes Courtesy of Tyler B.

• There are many more people who want to be actors than there is full time paid acting work available.

Since it isn't easy to earn an accounting degree and since the work is seen as difficult, Andrew knows that the supply of accountants is never going to be so great, relative to demand, that the pay for accountants will be driven down. In other words, he can expect to earn a good living. On the other hand, the supply of strong 18-year old who would like to work in construction jobs is much higher since entry-level jobs in construction require no skills or education.

• More students enjoy studying History than enjoy the math and science needed to get a degree in Chemical Engineering.

Many of the best-earning jobs in business are in sales where your income depends on how successful you are at selling your product. People in sales, however, can see their incomes rise and fall with business conditions and market demand for their products. This uncertainty keeps a lot of folks away from sales jobs, which raises the average pay for those who are willing to be in this profession.

• A large group of workers can bargain more effectively for higher wages or better benefits or working conditions than can individual workers.

• To be able to bargain more effectively with team owners by threatening to shut down the league if agreeable terms are not reached

• The percent of government workers who are union members is more than 5 times that of workers in the private sector.

• The demand for skilled workers is high in metro areas as is the cost of living.

• Other manufacturing of the same product can sell their products for less if their workers cost less.

Notes Courtesy of Mike C.

• The amount you will be paid for a skill is based on the supply of workers with that same skill and the demand for that skill.
• The supply of workers with a particular skill is based on many factors.
• Other jobs, which are seasonal or irregular, tend to be less desirable for most people than jobs that guarantee a regular paycheck. \
• For this reason, lifetime government jobs are attractive to a lot of people who will take a lower guaranteed salary as a civil servant than as an employee of a business that could lay them off if sales were not good.
• Even though a few state and local government workers were laid off during the recent economic downturn, job security as a government worker is considered to be much greater than it is in private industry.

Module 5: Property Income

Notes Courtesy of Jasleen A.

-Earned income (Money earned from work) is the largest source of income for most people. This includes the profit you make from owning a business.

-Transfer payments: Comes in the form of gifts from friends, relatives, or payments from the government for things other than wages or salary. [Ex: Gov. gives poor people welfare money, social security]

-Property income: Generated by assets we own.

-Human capital: The ability to generate income from our body and mind. [Ex. Bank accounts, investments in stocks, bonds, mutual funds]

-Non human capital: Property income generated by the physical assets we own. [Ex. Business, real

estate]

-Landlords: people who own rental real estate. They manage the property themselves, collect rents, mow the lawns, and fix the plumbing. Others pay management companies to do this work.

-Proprietor: Income from owning a business. (another name for someone who owns a business)

-Human capital: The work, effort and creativity that we put into a business. Form of income that is somewhat equal to opportunity cost.

Notes Courtesy of Geno B.

Earned income, or income earned from work is the largest source of income for most Americans.  Property Income generated by the physical assets that we own is often called "Non-Human Capital."  Income we receive from letting others use physical capital that we own is generally called "rent" or rental income. Most of the rental income that individuals receive comes from the ownership of real estate. In the US about 2/3 of families own their homes while the others pay rent. Income from owning a business is called business or proprietor’s income. An entrepreneur has traits such as, innovative, driven, risk taker, leader and family support.

Notes Courtesy of Kevin H.

-how to make money off of property

-landlords

-income from current jobs vs. previous

-opportunity cost

-investments

-advantage of owning your own business: you wont have a boss you cant stand

Module 6: Unearned Income from Financial Assets and Transfer Payments

Notes Courtesy of Clay N.

Mutual Funds - an investment program funded by shareholders that trades in diversified holdings and is professionally managed.

Social security - any government system that provides monetary assistance to people with an inadequate or no income.

Most people work for someone paid in wages tips and salary

People keep money in their transaction accounts because its easy to withdraw.

Profit from a stock is capital gain

Company bonds are less safe than U S government bonds

Notes Courtesy of Kaitlin W.
Nearly 94% of American families own some type of Financial asset
Transaction accounts are deposits where money can be withdrawn quickly, and they can be a checking, savings, or brokerage firm.
A certificate of deposit (CD) is a bank account where your money is deposited for a fixed period of time usually ranging from one month t to several years.
The most common type of bond is issued by the United States Government.
Company bonds are not as safe as U.S government bonds
Equities (stocks) are ownerships shares in a company
Mutual funds are companies that invest in stocks and bonds
Profit from a stock is called capital gain

Notes Courtesy of Tori H.

• Unearned income is a source other them a job.
• Transaction accounts are deposits where money can be withdrawn quickly.
• A checking account pays the interest but does not allow you to write checks on the account.
• A certificate of deposit is a bank account which your money is deposited for a fixed period of time.
• When your money is in the bank 250,000$ is not at risk because it's guaranteed by the federal government.
• Money in a bank certificate deposit is the safest financial asset in terms of not losing your money.
• You can use a debit card to access money in your checking account.
• Company bonds are not as safe as U.S government bonds.
• Equities are called stocks.
• Money sent to a shareholder is called a dividen.
• Stocks, bonds, or mutual funds can be held in retirement accounts.
• Main purpose of life insurance is to provide income to a family if an earner dies.
• Pentions are retirement income paid by an employer for whom you have worked.
• Social security is a pension plan run by the U.S government.
• Primary sources of income for most people age 20-35 is salaries, wages and tips.    

Module 7: The Consumer Life Cycle

Notes Courtesy of Josh R.

-the amount of money we make depends on job and schooling.

-stages

       -alpha stage are young, single, childless persons who are financially independent from their parents.

        -bravo stage is when your married but still childless.

        -charlie stage birth of first child and continues till they start school.

         -delta stage dependent children who are no longer preschool age.

        -echo stage last child fishes schooling and is no longer dependent on the parents.    

         -foxtrot stage is retirement stage.

Notes Courtesy of Nate S.

• estimate when you start working
• roughly how much you would make
• when you marry and have children
• Alpha- young, single, childless
• Bravo- married but childless
• Charlie- birth of first child
• Delta- dependent children who are no longer preschool age
• Echo- children finish schooling an are independent
• Foxtrot- retirement starts to death
• decline in traditional, stable family
• more woman in the workforce
• increase in the age of people getting married
• people change employers many times
• Daycare has increased because two parents work full time

Tori H.

Module 8: Income Over the Life Cycle

Notes Courtesy of Austin N.

• You actually only get 2/3 of your salary, 1/3 is taken for taxes
• Inflation
• People that go to college get more raises than people who don't

Notes Courtesy of Logan T.

·         The period between the beginning of financial self-sufficiency and marriage is the Alpha stage.
·         To avoid dealing with the uncertainties of inflation these charts are in real or today's dollars. This makes it easier for you to predict income and expenses in the future.
·         Household income will tend to increase a lot when a single person enters the Bravo stage because there are generally two incomes instead of one.
·         The Charlie Stage begins with the birth of the first child and continues until the last child is of school age. This is a period when some families experience loss of income as a parent leaves the labor force, fully or partially, to care for the young child (or children). In the Charlie stage, a fairly large percent of families see at least a temporary decrease in income. While a majority of Charlies now have both parents at work, it is still common in our society for a parent (most often the mother) to either leave the work force or cut back on the number of hours worked for pay to be at home with the young child. Families that follow this more traditional pattern tend to have reduced incomes during the Charlie stage.
·         For families with children, the Delta stage begins when the youngest child is at least six years old-school age. With all children in school, most families have both parents (if there are two parents) working full time. This means that the incomes of Delta families are often higher than in Charlie families.
·         The pre-retirement or Echo stage of the life cycle is a period with generally high, two-earner income and no dependent children. It is often called the "empty-nest" stage of the life cycle and lasts until retirement age. It begins when the last child is expected to be out of college, generally at about age 22, or otherwise "off the family dole."
·         If the adults in the household are working full-time before the Echo stage, income will continue at the same level in the Echo stage. It will generally drop off at retirement or Foxtrot age when income comes from pensions, Social Security and investments.

• 
  

Notes Courtesy of Joe N.

• In general, income pattern change over the life cycle
• Young people go from relying on their parents to relying only on themselves
• Alpha Stage- the period between the beginning of financial self-sufficiency and marriage
• Usually people only get raises if they do their job better and become more productive
• People with a college degree usually get hired easier
• Bravo Stage- Married couple with two incomes
• Charlie Stage- birth of your first child
• Delta Stage- youngest child is at least six and both parents are working
• Echo Stage- pre-retirement and no children live with you “empty nest stage”
• Foxtrot Stage- around the age 55 and no longer have to work

Module 9: Federal Income Taxes

Johnny C.

Notes Courtesy of Caleb D.

• Progressive Taxes- Any tax in which the rate increases as the amount subject to taxation increases
• Taxable Income- Taxable income refers to the base upon which an income tax system imposes tax. Generally, it includes some or all items of income and is reduced by expenses and other deductions. The amounts included as income, expenses, and other deductions vary by country or system.
• Deductions- the action of deducting or subtracting something.
• Exemptions- the process of freeing or state of being free from an obligation or liability imposed on others.
• Tax Brackets- a range of incomes taxed at a given rate.

Notes Courtesy of Tanner N.

(#3) The estimate is based on the amount of total we pay we get and the number of children and other dependents that we support.(#4) Tax rates may change from year to year as the result of changes in the laws and changes in tax brackets, which are adjusted for inflation.(#5) If a taxpayer dose not have enough deductions to itemize, he or she may instead choose to take the standard deduction of $6,100 per year for single taxpayers and $12,200 per year for taxpayers who were married and filed together.(#6) it is equal to his gross annual income minus his standard deduction minus his exemption.(#7) nothing to put....(#8) Federal tax brackets are indexed to the cost of living. This tends to keep inflation from bumping taxpayers into higher brackets and increasing their average rate.(#9) nothing to put....(#10) nothing to put....

Module 10: Other Deductions from Pay

Notes Courtesy of Zack K.

• Taxes that are paid to state and local governments are deductible items when figuring federal income taxes.
• If you work for yourself, you are considered to be your own employment and you must pay double the amount of social security and medicare taxes to the government.
• Some employers will pick up the entire cost of health insurance for their workers.
• Another benefit for getting your health insurance through work is that you do not have to pay income tax on the amount that your employer contributes to your health plan.
• If a retirement plan is considered to be qualified by the government, as most are, the contribution of the employee is tax deferrable.

Tyler B.
Dawn M.

Module 11: Tracking Expenses and Budgeting

Notes Courtesy of Tiffany Z.

·         about spending money

·         where it goes

·         keep track of what we spend with an expensive statement

·         compare  it to money we make in an income statement

·         putting together a budget

·         The record of how they have spent their money is called an expense statement and tells them how they have spent their money last week.

·         One reason for going to the trouble to put together an expense statement it that most of us find it difficult to save.

·         Before setting up an expense statement we must be certain that we are not counting the same thing twice (or double-count).

·         Advance of spending cash-1) easy quick and convenient 2) you can limit your spending to the amount you've brought with you.

·         though it doesn't leave good records like checks and debit/credit cards

·         an income statement contains all of her income and expenses for the month and shows how much she is saving and spending

·         and cooperative is similar to a condominium except that the cooperative associating owns the entire property and people who own apartments are shareholders of the association

·         cooperatives, or "co-ops" are found largely in large cities such as New York

Notes Courtesy of Celeste F.

• If we know how much income we have coming in and know how much we need to spend, we can estimate how much we will be able to save or dissave.
• Set up a budget for yourself and keep track of the money you spend. This will help you comprehend how to manage your money.

Ty P.

Module 12: Paying for What We Buy

Notes Courtesy of Ricky F.

• A washing machine is an investment partly because
• If it is less expensive to have you clothes picked up, cleaned and delivered than it is ti wash them yourself in your washer and dryer, the purchase of a washer and dryer would save you neither time nor money and would not be a good investment
• While depreciation may average $300 per year over the life of the tractor, Joe wouldn't be able to get anywhere near $2,700 for a one-year-old tractor since buyers would much prefer a new tractor for an additional $300 dollars.
• Virtually every ATM in the world charges a fee, particularly if your account is not at the bank that owns the ATM
• If you don't know the buyer, he or she could be using a stolen check or giving you a check on an account that doesn't have enough money to pay you the $200. It is also possible that the buyer has a phony ID, so you are far better off talking only cash.
• When you write a check, money will not generally be taken from your bank account until the check clears, which often takes a day or so. If you use a debit card, the amount that you paid will generally be taken from your account immediately. On the other hand, if you don't carry a fairly large balance, many banks will charge for each check that you write, but few if any charge fees for purchases made by debit cards.

Notes Courtesy of Geno B.

There are many different ways to pay for things that we buy. We can use cash, credit or debit cards, and bill payment systems. In recent decades, the widespread availability of the ATM has made the use of cash more convenient. If you have a checking account, you can generally pay for your purchases by writing a check. Banks may charge you for every check you write. You also don’t receive much interest on the money in your checking account. A debit card is a card that allows you to withdraw money and pay for things by charging your bank account immediately. Debit cards have become more popular and are used by people more than credit cards on average. Many banks now offer their customers a way to pay their bills without writing checks. Most allow your regular bills to be sent directly to the bank. A few banks have announced plans to start charging for the use of online bill payment services. When you buy something with a credit card, you’re actually borrowing money to make that purchase.

Johnny C.

Module 13: Using a Checking Account

·         Notes Courtesy of Logan T.

     A checking account is also called a demand deposit because the owner of the account can demand that his or her bank pay money to someone else. The way you demand payment is by writing a check.

·         At the top, on the left side, is her name and address. While only a name is necessary, it is useful to have an address and a phone number printed on your check.

·         If you don't include your personal information, merchants usually ask for this information so that they can contact you if your check is not good. This will happen if you do not have enough money in your account to cover the amount of the check.

·         The bank calls this insufficient funds or "NSF" while the rest of the world says that your check bounced. If your check bounces, the merchant doesn't get paid and has to come after you for payment.

·         The check number is used for record-keeping by the bank and by the account owner.

·         In general, if a check is older than six months after the date written on the check, it will not be honored by the bank.

·        Be sure that you write your checks in ink that cannot be erased. If you write in pencil, for example, someone can change numbers on your check or even the name of the person to whom the check is written.

·         The payee of the check is the name of the person, business, etc. to whom you want your money to go. You indicate the payee on the line that says "PAY TO THE ORDER OF______________________."

·         If you want cash from the bank, you can go to the bank and hand the teller a check made out to "cash" on the payee line. You should never carry around a check made out to cash because if it is lost, someone else can take it to the bank and get cash for it.

·         To the right of the PAY TO THE ORDER OF line is a box with a dollar sign in which you enter the amount of the check in dollars and cents with a decimal point between them.

·         Below the written amount line, we find the name and address of the bank, in this case, the Edgemont Bank.

·         To deposit or cash a check written to you, you must endorse it. This means that you must sign it on the reverse side of the check at the top of what would be the left side if you look at it from the front.

·         If you don't keep track of how much money you have left in your checking account, you will probably bounce a check.

·         When the bank gives you your checkbook, it will also give you a check register to carry with your checkbook to record the checks you write.

·         The AMOUNT OF PAYMENT OR DEBIT column is for you to record the amount of the check, ATM withdrawal or use of a debit card on the account

·         The AMOUNT OF CREDIT column is used to record deposits you make to your account. You should use a plus sign in front of the deposit because it is added to your balance.

·         Finally, there is a column to keep track of your balance, called BALANCE FORWARD.

Notes Courtesy of Caleb D.

In Using A Checking Account we will learn:

• Why a checking account is called a “Demand deposit account”.
• How we can bounce a check and what happens if we do so.
• How to write a check so that we wont get ripped off.
• How to endorse a check
• How to balance a checkbook

Miranda W.

Module 14: Renting a Home

Notes Courtesy of Tiffany Z.

·         Housing is the single greatest expense.

·         above 75 it decreases by a small amount

Advantages of Home Ownership

·         Availability of single-family homes

·         freedom of use

·         hedge against inflation

·         savings in "do it yourself"

·         tax benefits

·         forced savings

Advantages of renting

·         Availability of lower-cost housing

·         flexibility

·         no risk of loss of saving

·         adjust easily to family needs

·         no maintenance

·         shared facilities

·         With house values, they historically tend to keep pace. While renting a house the price of rent often will increase when prices in general go up.

·         when you buy a house the bank that lends you money

·         housing costs for more than a third of total expenses for American families in general and for young adult under 25

·         In 2010, according to the Census Bureau, 66.9% of American Families owned a home.

·         Home ownership increases by age from just 22.8 for those under the age of 25 to a high of 82.4% for those ages of 70-74.

·         With house values, they historically tend to keep pace. While renting a house the price of rent often will increase when prices in general go up.

·         When you buy a house the bank that lends you money for your mortgage will insist that you have homeowner's insurance.

·         Renters generally don't need fire insurance to protect their building because they don't own it.

Notes Courtesy of Jordan B.

-Once people begin to live on their own, they discover that housing is likely to be their largest cost, accounting for a third or more of total expenses.

-In general, young, single people tend to rent rather than buy their housing.

-When prices in general go up, house values have historically tended to keep pace. If you rent, your rent will often be increased as prices rise. If you own your home on a regular "fixed" mortgage, however, your monthly mortgage payments will not increase. Therefore, owning a home can protect you against inflation.

-When you own your own house, you are the boss. There is no landlord to tell you to get rid of your cat or that you can't put a satellite dish on the roof or paint the kitchen purple.

-A major advantage to owning a home is that the interest on your mortgage and your real estate taxes may be deducted from your income when you calculate your income tax.

-Another great advantage of renting is the flexibility it gives to the renter.

-Every homeowner runs the risk of losing money on his or her house.

-Leases vary as to who's responsible for paying for expenses such as electricity, heat and garbage collection. This should all be noted in the lease.

Notes Courtesy of Josh R.

-adults who are not in school or living at home, housing is the single greatest expense.

-people tend to rent than buy a house because of low cost of renting, flexibility, less maintenance.

-there are advantages and disadvantages in renting and owning.

-owning a home can save you against inflation.

-owning a home has more freedoms of what you can do.

-owning a home can lower your income tax.

-owning a home has a risk of losing money.

Module 15: Owning a Home

Dawn M.

Notes Courtesy of Joe N.

• Generally it costs more to own a home rather to rent one
• Borrowed money is called a loan
• Standard mortgage requires a down payment of 20%
• Pay an annual tax based on the value of their property – Property tax
• Maintenance   

Notes Courtesy of Gabe P.

·        $164,500 is the average price of a house.

·        Mortgage insurance makes you have a lower down payment.

·        Amortization- Interest of your mortgage payment.

·        Standard mortgage requires a 20% down payment.

·        Variable rate mortgages can rise but start out cheaper, Fixed rates can’t rise but start out more expensive.

·        Implicit interest is the interest that you could have had, rather than interest that he must actually pay.

·        There are maintenance costs when you have a home.

·        Home owners insurance costs one half of 1% of the home’s value.

·        Energy bills cost 01.25% of the home’s value.

Module 16: Food and Clothing

Notes Courtesy of Austin N.

• Food costs more if you go to a restaurant rather than eating at home
• People mostly buy clothes to look good, not because we need the new clothes
• Everyone has to pay a sales tax on food and clothing
• Sometimes you don't have to pay a sales tax when ordering things online

Dylan A.
Jake G.

Module 17: Buying or Leasing a Vehicle

Notes Courtesy of Tanner N.

(#1)That's in spite of the fact that gasoline is a lot cheaper in the U.S. Than in most of the other developed countries of the world.(#2) Another fixed cost for those who buy a car for cash or buy it using installment payments over time is the opportunity cost of the money you have invested in it witch cannot earn money for you in another investment.(#3)Generally, this will be the least expensive way of buying a vehicle in the long run.(#4) The person who has an installment loan will own the vehicle when the loan periods is over and can drive that vehicle for years without making additional vehicle payments.(#5) The more you barrow, the higher the interest rate, or the shorter the loan period, the higher would be your monthly payment.(#6) While this can make a big difference in the size of the monthly payment, it also increases the total number of payments that the buyer must make and ultimately, the total amount of finance charges that must be paid.(#7) The amount that the vehicle depreciates over the lease period. The interest on the money borrowed during the lease period.(#8) Some vehicles have higher depreciation rates than other vehicles, but fifty percent is about average for three years.(#9) The wise computer, however, will shop around for the best interest rate before signing up for any type of vehicle financing.(#10) If you come prepared with an offer from a direct lender such as a bank or credit union, it may put you in a better position when negotiating when negotiating with the dealer.  

Notes Courtesy of Nate S.

• average family spends more on transportation than any other expense except housing
• 86.3% of Americans drive to work by personal vehicle
• Fixed Costs- same from month to month including insurance, vehicle registration, parking,
• Depreciation- your vehicle becomes less valuable each year the decrease in value
• can barrow the money from a loan to buy a vehicle or you can lease it
• leasing is popular for those who don't have much savings
• can be expensive to end a lease agreement before the lease is up
• many buyers choose to pay off their cars over a longer period of time

Alexis S.

Module 18: Operating a Vehicle

Notes Courtesy of Zack K.

• Most US car insurance coverage does not cover in Mexico.
• A second type on vehicle insurance is called collision insurance.
• If you are hit by an uninsured motorist, you may be out of luck.
• Rates also vary by geographic area.
• You must always ask for the discounts for which you may qualify.

Notes Courtesy of Celeste F.

• Most US car insurance coverage does not cover in Mexico
• A second type on vehicle insurance is called collision insurance.
• If you are hit by an uninsured motorist, you may be out of luck.
• Rates also vary by geographic area.
• You must always ask for the discounts for which you may qualify.

Miranda W.

Module 19: Vacation and Leisure

Notes Courtesy of Grace J.

- Americans average just two and a half weeks of paid vacation per year.

- Americans tend to spend only about 9% of their incomes on vacations and recreations.

- Taking an airplane for vacation would be faster, while taking a car would be cheaper.

- Business people cant schedule flights far in advance so they pay more for flexibility.

- A travel agent is someone who gives knowledge about the place the person is visiting. It's best to get a travel agent when going on vacation, or when you're probably going to be there only once in your lifetime.

- It costs the airline something to operate a frequent flier service and both Orbitz and Priceline charge the airline a commission for their services. The airline is filling seats, however, that would have probably been empty. Thus, the costs for issuing a frequent flier or Priceline ticket aren't very much.

- The cost of an airline flight is essentially the same regardless of the number of passengers.

- The cheapest hotel rooms in Florida can be found off-season (in the summer when it is really hot) and with advance booking which means that you are not likely to be a business traveler who is not price sensitive.

- A hotel's costs are largely fixed whether it is at capacity or it has many rooms empty.

Notes Courtesy of Clay N.

Americans get on average 13 vacation days a year

Americans spend 9% of their income on vacation and recreational

Airlines can charge whatever they want

You need a ticket to ride a plane

Jake G.

Module 20: Investing in Physical Asset

Notes Courtesy of Ricky F.

• As a business, the laundromat cannot afford to allow one of its significant costs (electricity) to increase without raising prices to cover this increase or it could no longer earn a profit and stay in business.
• When a salesperson keeps trying to sell you an extended warranty for an appliance, it probably means that the store will earn a large profit on selling that warranty and that it is likely that the salesperson will get a bonus for making that sale.
• Depreciation would be $4,000/8 = $500 per year. Interest would be $4,000 x .06 = 240 per year. Operating expenses are $30 and repairs and maintenance are $50 per year for a total of $820 per year

Ty P.

Alexis S.