Personal selling is when businesses use people to “sell” the product to a customer face-to-face. These sales people promote the product with every aspect of themselves, including their appearance, attitude and special knowledge of the product.
The four stages included in the product life cycle are introduction, growth, maturity, and decline. This cycle is extremely important for managers to monitor in order to plan an effective strategy for their business.
Comparative Advantage is the concept where one person, business, or economy is able to outproduce one particular product or service compared to another person, business, or economy.
The “Gross Domestic Product” of a country is the total value of all finished goods and services that were produced in a given year. In other words, this is the total economic output. GDP is used to measure the total size of an economy, and therefore how much the economy has grown (or shrunk) in a year.
To be “in debt” means to owe money to someone else, usually making fixed payments to pay back the amount over time, plus interest.
Risk is one of the most important concepts in investing, economics, and personal finance. Our appetite for, or aversion to, risk is the biggest driver behind spend and save decisions. Despite this, very few people really understand just how big a role risk plays in our everyday lives.
A contract is a legally binding agreement between two parties (people, companies, or both) in which something of value is exchanged. One party promises to do something in return for a something else. Since a contract is legally binding, if one party does not do what was agreed upon, the other party can sue them in court to either enforce the contract or receive compensation. Contracts are involved in personal and business dealings, so it is important that you understand the rules governing them.
Credit is when you use borrowed money with a promise to repay it at a later date. Credit comes in many forms from credit cards to mortgages. There is a wide range of ways to use credit, which means that it is often a challenge for beginners to learn all the ins and outs of using credit wisely.
Property rights is the foundation of all free-enterprise economic systems. It is what allows people to profit from capital and ideas, without fear of seizure by the government or theft.
The government has two main ways it tries to influence the economy – through Fiscal Policy and Monetary Policy. Fiscal policy is the more direct approach, where the government levies taxes and subsidies to try to balance its budget while encouraging growth, while monetary policy is less direct – tweaking interest rates and modifying the money supply.
International Trade is the system under which businesses, individuals, and governments trade goods and services. This exchange from many different National economies is what makes up the Global economy.
Inflation: how much less a dollar is worth next year compared to today. Most consumers hate inflation – it erodes your savings, and eats away at the real benefits you get from increasing income. However, inflation plays a necessary role in the economy, and without it much of the economy would quickly fall apart.
Government spending makes up a whopping 20% of all spending in the American economy, including the salaries of all government employees, government contracts to private companies, and military spending. This is all paid for by taxes, meaning more than 1/3 of all economic activity filters through the public sector in some way.
This means government taxing and spending will have a huge impact on the rest of the economy, and so the way people and businesses are taxed, and how the money is spent, is centered on how it impacts the rest of the economy. The way the government organizes these taxes and spending to influence the economy is called the Fiscal Policy.
The “Time Value of Money” is one of the most important concepts in economics, investing, and business. For individuals, this determines how much you save and spend. For businesses, it determines how quickly they try to expand. For investors, it decides the mix of a portfolio.
In Economics, “Demand” is the relationship between prices and how much people want to buy a good or service.
In Economics, “Supply” means the relationship between prices and production. In general, the higher the market price of a good or service is, the more producers are willing to sell of it.
Cottage Industry, or the “Putting Out System” is a production system of producing goods that relies on producing goods, or parts of goods, by craftsmen at home, or small workshops, instead of large factories.
Brokerages exist to allow individuals to make investments into the larger market. In other words, they connect individuals to the markets as a whole.
Life insurance is an insurance policy designed to pay out if the insured person dies. These policies were created so that if the main income holder of a household died, the payout from the policy could be used to support his/her family. Over the last 50 years, life insurance policies have greatly expanded in both form and function. Sometimes they look more like investment vehicles than simple insurance policies.
On every payday, start by taking out money for savings and put it directly into your savings or investing account. Most banks have accounts that will let you do this though automatic transfers. This is one banking service that you should definitely take advantage of.
Once your savings is taken care of, use the remaining cash to pay your bills. Any money remaining can be used for fun and leisure. This method is a no excuses savings approach. No matter what else is happening in your life, you are paying yourself by contributing to your savings. This habit ensures that your savings and investments experience a steady growth rate.
On every payday, start by taking out money for savings and put it directly into your savings or investing account. Most banks have accounts that will let you do this though automatic transfers. This is one banking service that you should definitely take advantage of.
Once your savings is taken care of, use the remaining cash to pay your bills. Any money remaining can be used for fun and leisure. This method is a no excuses savings approach. No matter what else is happening in your life, you are paying yourself by contributing to your savings. This habit ensures that your savings and investments experience a steady growth rate.
A credit card is a form of unsecured credit (meaning a loan without collateral) that you can use to make everyday purchases. All credit card purchases are made using a loan. You borrow money from your credit card issuer to make the purchase and pay it back later, plus interest.
Credit reports contains your credit history – both the good and the bad. If you watch late-night TV, you may have seen a few commercials offering free credit reports, so you might know a little about them. Most people don’t know how important a credit report can play in their financial lives.
Credit reports contains your credit history – both the good and the bad. If you watch late-night TV, you may have seen a few commercials offering free credit reports, so you might know a little about them. Most people don’t know how important a credit report can play in their financial lives.
The Dow Jones Industrial Average, more frequently known as the Dow or the Dow Jones, is a stock market index made up of 30 of the largest publicly-owned companies based in the United States. It’s a price weighted index meaning that the index’s price is an average of the price of the 30 stocks that make it up.
“Spending Shocks” are large, irregular expenses. According to CBS, more than 60% of Americans cannot absorb a $500 spending shock: spending shocks are the #1 reasons why budgets end up abandoned, and being prepared for large spending shocks is the best thing you can do to keep your personal finances healthy.
The New York Stock Exchange (or NYSE) is the largest stock exchange in the world. Think of it as an organized, fast-paced flea market where buyers and sellers from all over the world come to trade U.S. stocks (and now some foreign shares as well). It is where over 2,800 of the biggest U.S. companies have their shares listed.
Mutual Funds are a way you can buy into a wide range of stocks, bonds, money markets, or other securities all at once. They are professionally managed, so you are basically buying a piece of a larger portfolio.
An investing strategy is a plan for how to save money and help it grow. Sometimes an investing strategy can be as simple as “plan for trading stocks,” but it really means a lot more.
“Unemployment” is a major economic indicator measuring how much of the working population is currently looking for a job. The unemployment rate is the most “tangible” economic indicator – if GDP is going up or down, it is harder for people to notice in their day-to-day lives. When the unemployment rate goes up, it usually means you or someone you know lost their job recently, which puts a great strain on individuals.
“Specialization” is when a labor force begins to divide total production, leading to a rise of experts or specialists. This is called the Division of Labor, and it typically results in much higher productivity of labor.
Scarcity refers to the fact that resources are finite – people and organizations need to allocate their finite resources between their infinite wants.
“Opportunity Cost” is what needs to be given up to get something. This is different from an item’s price.
Everyone knows about costs and benefits of doing something – the pros and cons of making a choice. Marginal benefit and marginal cost are different – they look more closely at doing slightly more or less of different alternatives. Marginal costs and benefits are extremely important to producers when choosing their inputs and prices.
“Labor” is how much a person works. It is the use of time and exertion of effort to produce something of value. Generally speaking, the more valuable a person’s labor is, the higher their wage.
In Economics, an “Externality” is a benefit or cost that is not reflected in the price of a good or service.
Interest rates are growth rates – it is a percentage that is used to calculate how much a loan or investment grows over time.
An Entrepreneur is someone who takes a risk to start a new business. Nearly every business that exists (apart those created as spin-offs of other businesses, or by government intervention) was started by one or several entrepreneurs, who took a risk to launch a new company.
“Economics” is often called the Dismal Science – it studies the trade-offs between making choices. The purpose of economics is to look at the different incentives, assets, and choices facing people, businesses, schools, and governments, and see if there is any way to improve outcomes.
Economic Incentives includes anything that pushes people, businesses, and governments to do one thing or another. This includes what products you buy, what career you choose, what products businesses produce, and what government programs are put in place.
Economic Growth means that the economy is growing. More goods and services are being produced and consumed than they were before. The most common measurement of economic growth is the Gross Domestic Product (or GDP), which measures the total number of finished goods and services produced in an economy in a year.
“Competition” is when many producers try to sell similar goods to the same set of consumers. The producers need to “compete” to try to attract more consumers, usually by lowering prices, offering better versions of the goods or services, or through marketing.
The Federal Reserve Bank, or the “Fed”, is the central banking system of the United States. It serves as the primary regulator of the US dollar, as well as the “lender of last resort” for other banks.
“Price Controls” are artificial limits that are put on prices. If the limit is put in place to prevent prices from getting too high, they are called Ceilings. If they are in place to prevent the price from getting too low, they are called “Floors”.
The Business Cycle is the broad, over-stretching cycle of expansion and recession in an economy.
Competitive advantage is what makes a business better than everybody else at whatever it is they do. The business with a competitive advantage has an edge over its rivals and provides greater value for its stakeholders. There are many ways to achieve competitive advantage, but the two most common ways are price cutting and differentiation.
The Human Resources department at a business is in charge of everything from hiring and firing employees, organizing and implementing training programs, resolving internal conflicts, determining the pay scales, and everything in between.
Social responsibility is having a sense of duty to society and everything that is a part of it. In other words, “social responsibility” means managers are accountable to society at large, not just their shareholders.
The cash flow statement allows company management to see where the company’s money is coming from and how it is being spent. Most companies will complete a cash flow statement at least quarterly because it the best financial report to show how well the company generates cash to pay its debts and fund its operating expenses.
A student loan is exactly what it sounds like – a loan given to students to finance their studies. This is most common for college or university students, but also works for trade schools and other vocational studies.
The income statement primarily focuses on the company’s revenue and expenses (what they’ve earned and what they’ve paid for) during a particular period of time. The bottom line shows a net profit or a net loss depending on the company’s performance during that time period. Companies may complete an income statement whenever they want, but typically they are completed quarterly (every three months) or annually.
Personal selling is when businesses use people to “sell” the product to a customer face-to-face. These sales people promote the product with every aspect of themselves, including their appearance, attitude and special knowledge of the product.
The four stages included in the product life cycle are introduction, growth, maturity, and decline. This cycle is extremely important for managers to monitor in order to plan an effective strategy for their business.
Comparative Advantage is the concept where one person, business, or economy is able to outproduce one particular product or service compared to another person, business, or economy.
The “Gross Domestic Product” of a country is the total value of all finished goods and services that were produced in a given year. In other words, this is the total economic output. GDP is used to measure the total size of an economy, and therefore how much the economy has grown (or shrunk) in a year.
Risk is one of the most important concepts in investing, economics, and personal finance. Our appetite for, or aversion to, risk is the biggest driver behind spend and save decisions. Despite this, very few people really understand just how big a role risk plays in our everyday lives.
Property rights is the foundation of all free-enterprise economic systems. It is what allows people to profit from capital and ideas, without fear of seizure by the government or theft.
Brokerages exist to allow individuals to make investments into the larger market. In other words, they connect individuals to the markets as a whole.
On every payday, start by taking out money for savings and put it directly into your savings or investing account. Most banks have accounts that will let you do this though automatic transfers. This is one banking service that you should definitely take advantage of.
Once your savings is taken care of, use the remaining cash to pay your bills. Any money remaining can be used for fun and leisure. This method is a no excuses savings approach. No matter what else is happening in your life, you are paying yourself by contributing to your savings. This habit ensures that your savings and investments experience a steady growth rate.
On every payday, start by taking out money for savings and put it directly into your savings or investing account. Most banks have accounts that will let you do this though automatic transfers. This is one banking service that you should definitely take advantage of.
Once your savings is taken care of, use the remaining cash to pay your bills. Any money remaining can be used for fun and leisure. This method is a no excuses savings approach. No matter what else is happening in your life, you are paying yourself by contributing to your savings. This habit ensures that your savings and investments experience a steady growth rate.
A credit card is a form of unsecured credit (meaning a loan without collateral) that you can use to make everyday purchases. All credit card purchases are made using a loan. You borrow money from your credit card issuer to make the purchase and pay it back later, plus interest.
Credit reports contains your credit history – both the good and the bad. If you watch late-night TV, you may have seen a few commercials offering free credit reports, so you might know a little about them. Most people don’t know how important a credit report can play in their financial lives.
The Dow Jones Industrial Average, more frequently known as the Dow or the Dow Jones, is a stock market index made up of 30 of the largest publicly-owned companies based in the United States. It’s a price weighted index meaning that the index’s price is an average of the price of the 30 stocks that make it up.
The government has two main ways it tries to influence the economy – through Fiscal Policy and Monetary Policy. Fiscal policy is the more direct approach, where the government levies taxes and subsidies to try to balance its budget while encouraging growth, while monetary policy is less direct – tweaking interest rates and modifying the money supply.
International Trade is the system under which businesses, individuals, and governments trade goods and services. This exchange from many different National economies is what makes up the Global economy.
Inflation: how much less a dollar is worth next year compared to today. Most consumers hate inflation – it erodes your savings, and eats away at the real benefits you get from increasing income. However, inflation plays a necessary role in the economy, and without it much of the economy would quickly fall apart.
A mortgage is a type of secured loan, with real estate or a house used as collateral. This means you will make an agreement with your bank, credit union, or savings & loan institution to borrow a large sum of money, with a piece of property as collateral.
Government spending makes up a whopping 20% of all spending in the American economy, including the salaries of all government employees, government contracts to private companies, and military spending. This is all paid for by taxes, meaning more than 1/3 of all economic activity filters through the public sector in some way.
This means government taxing and spending will have a huge impact on the rest of the economy, and so the way people and businesses are taxed, and how the money is spent, is centered on how it impacts the rest of the economy. The way the government organizes these taxes and spending to influence the economy is called the Fiscal Policy.
The “Time Value of Money” is one of the most important concepts in economics, investing, and business. For individuals, this determines how much you save and spend. For businesses, it determines how quickly they try to expand. For investors, it decides the mix of a portfolio.
Bankruptcy is a type of forced debt settlement, and it is a legal procedure. When you declare bankruptcy, the court will gather all your unsecured creditors together to hear about the debts you owe. They will then examine all your assets and determine a plan to pay out as much as they can to settle as many debts as possible.
In Economics, “Demand” is the relationship between prices and how much people want to buy a good or service.
In Economics, “Supply” means the relationship between prices and production. In general, the higher the market price of a good or service is, the more producers are willing to sell of it.
Cottage Industry, or the “Putting Out System” is a production system of producing goods that relies on producing goods, or parts of goods, by craftsmen at home, or small workshops, instead of large factories.
“Unemployment” is a major economic indicator measuring how much of the working population is currently looking for a job. The unemployment rate is the most “tangible” economic indicator – if GDP is going up or down, it is harder for people to notice in their day-to-day lives. When the unemployment rate goes up, it usually means you or someone you know lost their job recently, which puts a great strain on individuals.
“Specialization” is when a labor force begins to divide total production, leading to a rise of experts or specialists. This is called the Division of Labor, and it typically results in much higher productivity of labor.
Scarcity refers to the fact that resources are finite – people and organizations need to allocate their finite resources between their infinite wants.
“Opportunity Cost” is what needs to be given up to get something. This is different from an item’s price.
Everyone knows about costs and benefits of doing something – the pros and cons of making a choice. Marginal benefit and marginal cost are different – they look more closely at doing slightly more or less of different alternatives. Marginal costs and benefits are extremely important to producers when choosing their inputs and prices.
Consolidating your debt means taking out one big loan and using that money to pay off all outstanding balances from your previous loans.
“Labor” is how much a person works. It is the use of time and exertion of effort to produce something of value. Generally speaking, the more valuable a person’s labor is, the higher their wage.
Interest rates are growth rates – it is a percentage that is used to calculate how much a loan or investment grows over time.
In Economics, an “Externality” is a benefit or cost that is not reflected in the price of a good or service.
An Entrepreneur is someone who takes a risk to start a new business. Nearly every business that exists (apart those created as spin-offs of other businesses, or by government intervention) was started by one or several entrepreneurs, who took a risk to launch a new company.
“Economics” is often called the Dismal Science – it studies the trade-offs between making choices. The purpose of economics is to look at the different incentives, assets, and choices facing people, businesses, schools, and governments, and see if there is any way to improve outcomes.
Health insurance is usually the most complicated and expensive insurance you need. Unfortunately, it’s also usually the most important, making it very difficult to avoid the cost. With very few exceptions, health insurance is mandatory for all citizens in the United States, but the way you become insured will change drastically based on your age, income, and the company you work for.
Economic Incentives includes anything that pushes people, businesses, and governments to do one thing or another. This includes what products you buy, what career you choose, what products businesses produce, and what government programs are put in place.
Economic Growth means that the economy is growing. More goods and services are being produced and consumed than they were before. The most common measurement of economic growth is the Gross Domestic Product (or GDP), which measures the total number of finished goods and services produced in an economy in a year.
Life insurance is an insurance policy designed to pay out if the insured person dies. These policies were created so that if the main income holder of a household died, the payout from the policy could be used to support his/her family. Over the last 50 years, life insurance policies have greatly expanded in both form and function. Sometimes they look more like investment vehicles than simple insurance policies.
Homeowner’s Insurance is a broad type of insurance coverage designed to cover a home, its contents, and the property it sits on. This insurance is very broad, wrapping many different types of coverage into one package.
Renter’s Insurance is taken out on property you rent to insure against damage or loss. Renter’s insurance works in a similar fashion to homeowner’s insurance. Homeowner’s insurance is designed to cover damage to a home’s interior and exterior, the theft of possessions, and personal liability for harm to others, for example if someone fell down your porch steps and sued you.
An investing strategy is a plan for how to save money and help it grow. Sometimes an investing strategy can be as simple as “plan for trading stocks,” but it really means a lot more.
Once you file your income taxes, the IRS will review all the forms you submit (your tax return) and either accept your submission or reject and return it to you for a correction, usually with very little turnaround time. This can happen whether you are paying what you owe or receiving a refund. However, occasionally the IRS will decide to “audit” your tax return, asking you to provide some supporting documentation before your tax return is accepted.
Mutual Funds are a way you can buy into a wide range of stocks, bonds, money markets, or other securities all at once. They are professionally managed, so you are basically buying a piece of a larger portfolio.
The New York Stock Exchange (or NYSE) is the largest stock exchange in the world. Think of it as an organized, fast-paced flea market where buyers and sellers from all over the world come to trade U.S. stocks (and now some foreign shares as well). It is where over 2,800 of the biggest U.S. companies have their shares listed.
“Spending Shocks” are large, irregular expenses. According to CBS, more than 60% of Americans cannot absorb a $500 spending shock: spending shocks are the #1 reasons why budgets end up abandoned, and being prepared for large spending shocks is the best thing you can do to keep your personal finances healthy.
“Competition” is when many producers try to sell similar goods to the same set of consumers. The producers need to “compete” to try to attract more consumers, usually by lowering prices, offering better versions of the goods or services, or through marketing.
Credit reports contains your credit history – both the good and the bad. If you watch late-night TV, you may have seen a few commercials offering free credit reports, so you might know a little about them. Most people don’t know how important a credit report can play in their financial lives.
“Sales Tax” is a tax that is charged on goods sold to end customers, the final user of that product. The sales tax is a set percentage of the sale price of the goods sold, and individual states set their own sales tax percentages. Most states use sales taxes to generate revenue to pay for the state’s operations, but some charge no sales tax at all.
The Federal Reserve Bank, or the “Fed”, is the central banking system of the United States. It serves as the primary regulator of the US dollar, as well as the “lender of last resort” for other banks.
“Price Controls” are artificial limits that are put on prices. If the limit is put in place to prevent prices from getting too high, they are called Ceilings. If they are in place to prevent the price from getting too low, they are called “Floors”.