Ramsey Classroom Ch. 3 Post Test Answers 100% Correct

Ramsey Classroom Ch. 3 Post Test Answers 100% Correct In order to outpace inflation when investing, your investments need to have a lower rate of return than the rate of inflation. False _______ is a millionaire's best friend. Compound growth The only place you should keep your emergency fund money is... A savings account or money market account Compound interest is earned at a fixed rate, while ________ is an average based on an investment's past performance. Compound growth Which two habits are the most important for building wealth and becoming a millionaire? Consistently investing money and patience to give it time to grow What is the goal of an emergency fund? To have cash on hand for unexpected events 90% of millionaires make over $100,000 a year. False Once you have a $500 emergency fund, you should . . . Save it until you have an emergency Why do stores rarely advertise the full price of big purchases like smartphones? By showing you only the monthly payment, they make the product seem affordable. If people saved the equivalent of a car payment each month for a year or two (instead of spending it on payments and interest), they could have enough money to buy a car with cash for much cheaper! True Once you're out of school, have started your career, and have zero debt, your emergency fund should have _________. 3-6 months of living expenses The main reasons for saving your hard-earned money are... Emergencies, large purchases, and wealth building If you really want to save money, you've got to . . . Live on less than you make Which principle says that a certain amount of money today is worth more than the same amount in the future? The time value of money You should budget in this order: giving, savings, spending. True The top three careers reported among millionaires were _____________, _____________, and ___________. Accountants; engineers; teachers The best way to build wealth is to start investing early. You should start investing money . . . Once you're out of college, living debt-free, and have 3-6 months of living expenses saved The purpose of an emergency fund is to... Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong. You'll have less freedom with your money if you . . Are paying for things in your past The amount of interest charged on a debt but not yet collected is called... Accrued interest One of the main reasons we build wealth