The Millionaire Next Door Questions
After reading The Millionaire Next Door, answer the following twelve (12) questions and
compose your Reflective Writing.
1. Explain the following two (2) concepts addressed in The Millionaire Nex
Personal Balance Sheet
Purpose - To determine your current financial position.
Instructions - List the current values of the asset categories below; list the amounts owed for
various liabilities; total assets minus total liabilities = net worth.
Money Management Day to day financial activities necessary to manage current person economic
resources while working toward long term financial security.
Safe Deposit Box- A privat4e storage area at a financial institution with maximum security
Chapter 4 Notes
taxable income- The net amount of income, after allowable deductions, on which income tax is
earned income- Money received for personal effort, such as wages, salary, commission, fees, tips, or
investment income -Money r
Finance Notes Chapter 1
Must use Future Value Chart in page 37
40,000*1.558=62320 Answer Correct
Personal Finance: Chapter 3
1. Payments that do not vary from month to month are _ expenses.
2. An investment account that increases from $3,000 to $3,271 in one year is earning
about _ percent.
3. Which of the following payments would be co
Personal Finance: Chapter 6
1. If you have declared personal bankruptcy, that fact may be reported to credit
bureaus for: _ years.
2. Paul Carter is applying for a loan from a bank. The bank is concerned because Paul is
an airline pilot for United A
Personal Finance: Chapter 4
1. Kelly Vernon wants her tax return prepared by a government approved tax expert.
Which of the following tax preparers should Kelly use?
a. an enrolled agent
2. Which of the following is a retirement plan sponsored by an emplo
Personal Finance: Chapter 1
1. Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks:
a. a time frame.
2. Opportunity cost refers to:
a. what a person gives up by making a choice.
3. Some savings and investment choices have the pot
Personal Finance: Chapter 5
1. Checking accounts are frequently referred to as _ deposits.
2. Investment companies are also called:
a. Mutual funds
3. The funds deposited in a checking account can be restricted for use by:
a. A holding period
Solutions to Chapter 5
The Time Value of Money
Compound Interest. Old Time Savings Bank pays 4% interest on its savings accounts. If you
deposit 1,000 in the bank and leave it there:
How much interest will you earn in the 1st year?
How much in
Finance 3040 - Study guide for Midterm #2
Time Value of Money
What is meant by Compounding?
Interest earned on interest.
Interest rate x initial investment.
The inverse of Discounting
The interest rate you need to earn on a given
Finance 3040 - Study guide for Midterm #1
What are the decision areas of financial management?
The Investment (Asset) decision
The Financing (Capital Structure) decision
How does a incorporation affect financial management decisions?