Financial Basics 101: Important Money Concepts You Must Know

Learn how banks take savers' money, offer savings and checking, and loan funds for homes and businesses, while maintaining liquidity and public confidence with government backing.

Learn how the Fed sets interest rates via open market operations, shaping the prime rate and net interest margin to influence loans, savings, and mortgages.

Understand certificates of deposit, which offer higher interest by locking funds for six months to five years, with bank and federal guarantees, penalties for early withdrawal, fixed and step-rate options.

Learn how credit scores shape loan eligibility for home and car loans, and how income verification and timely payments influence your FICO score from Equifax, Experian, and TransUnion.

Learn how the stock market enables investors to own part of a company, earn dividends, and participate in governance, while managing risk and price changes.

Stay on your board by maintaining a fixed allocation, avoiding emotional trades, and adjusting assets for your expected return and future needs, recognizing markets average about 11% annually.

Explore stock valuation by applying a simple model: value equals expected dividend divided by (required return minus growth rate). Assess whether a stock is undervalued or overvalued.

Learn how to open a brokerage account, compare full-service and discount brokers, and use robo advisors to build a portfolio based on the investor's needs.

Mutual funds let a professional manager invest a basket of stocks for you, with fees and potential returns. Choose funds by investment objectives and benchmarks to support retirement goals.

Compare exchange traded funds with mutual funds and learn how ETFs offer a passive way to track market baskets, with lower expense ratios and tracking error considerations.

Learn how bonds work as debt instruments, with par value, price, coupon, maturity, and yield. Compare investment-grade and junk bonds using rating agencies S&P, Moody's, and Fitch.

Diversify your portfolio to reduce stock market risk and tap into the superstar stocks driving long-term returns. Invest in broad-based ETFs or mutual funds and hold for the long term.

Explore how insurance embodies risk aversion by paying a premium to prevent large losses, focusing on health, life, and property and casualty coverage and the loss, expense, and combined ratios.

Compare term life and whole life insurance, explaining level and decreasing term, traditional, universal, and variable life options, their death benefits, premiums, cash value, and how investments affect outcomes.

Explore property and casualty insurance, including homeowner's and auto insurance. Compare premiums, deductibles, and the declarations page to balance cost, coverage, and personal risk.

Learn how health savings accounts (HSAs) pair with a high deductible health insurance plan to offer tax-free contributions, tax-deferred growth, and flexible withdrawals for medical expenses, with investment options.

Develop a retirement plan with a clear vision, goals, and budget. Use tax-advantaged vehicles and asset allocation rules to sustain withdrawals.

Explore tax-deferred retirement plans, notably 401(k) for for-profit employers and 403(b) for nonprofits, with employer matching, catch-up contributions up to $26,000 at age 50+, and penalties on early withdrawals.

Compare traditional IRAs, Roth IRAs, and SEP accounts to understand tax treatment and growth potential. Learn contribution limits, eligibility, and how conversions from traditional to Roth can expand retirement savings.