Someone once said money is a necessary evil. It certainly is a necessity.
Understanding how to use and protect your money is also a necessity. Knowing how money works, can be almost as good as having a wealthy uncle.
April is Financial Literacy Month, so Sid Kirchheimer challenged readers in the AARP Bulletin to take a MONEY QUIZ.
Five years ago I would have failed it. Then if the conversation was about finance and banking, I walked away. But the present financial picture made me ask questions and read financial journalist Jean Chatzky, personal finance expert, Suze Orman.
Yes, there’s a lot of information out there. Some of it confusing. But we can’t put our money in some fund if we don’t understand how it works.
Challenge yourself and answer the following questions from Kirchheimer’s quiz:
1. Which statement about a certificate of deposit is false?
A. A CD is an interest-bearing savings certificate insured by the FDIC.
B. It pays a fixed interest rate for a fixed term.
C. It has no fixed term and usually has a variable interest rate.
D. Penalties result if money is withdrawn before the term ends.
2. Which of the following is false?
A. An IRA and a 401(k) are both retirement saving accounts.
B. A 401(k) is offered through your workplace, usually with employer contributions.
C. An IRA is funded with your own money, sometimes with contributions by employers.
D. An IRA can be opened with $1,000; a 401(k) requires $401.
3. Most credit scores range from 300-850.
A. True B. False
4. For late savers in their mid-50s, what’s the recommended amount of an $80,000 annual income that should be contributed to an IRA or other retirement account in order to retire comfortably at age 65?
5. What is the difference between a stock and a bond?
A. Nothing. They are the same.
B. Investing in stock means you’ve bought part of a company; investing in bonds means you’ve loaned money to companies, governments or other groups in exchange for interest payments and redemption of the bond when it matures.
C. A stock has no expiration date; bonds are issued for specified time periods.
D. B and C
How did you do?
If you get all five or if you don’t, learn more. Go to:
There are 30 questions,
25-30 move over, Warren Buffett!
16-24 more like Jimmy Buffett
8-15 still can’t afford a weekly lunch buffet
0-7 time for Financial Literacy School.
Thanks to epSos.de photostream