Financial Literacy Prelims

Knowledge of investment, understanding risks, and having a small capital can generate substantial returns.

Personal Finance encompasses spending, saving, protecting, and investing personal and family resources.

One of the Fundamental Steps in Financial Planning include periodically developing and implementing spending plans.

Financial Success refers to the achievement of financial aspirations.

Financial Happiness is the uncomfortable feeling that your resources will be sufficient to meet your needs and most wants.

The formula "Income – Savings = Expense" is a sound financial principle.

Distinguishing between wants and needs is not essential in personal finance.

Money itself is inherently evil.

The economy refers to the management of productive and employment resources in a country, state, or community.

Inflation is a condition of decreasing production and consumption in the economy, leading to lower national income.

A career is defined as the lifework chosen by a person to use personal talent, education, and training.

Career clusters group all possible careers within a specific subject area.

Career planning involves finding employment that matches your interests and abilities while providing financial support.

A career plan outlines only long-term goals and does not consider future education and work-related experiences.

The Four Elements of Ikigai include what you love, what you're good at, what the world needs, and what you can be paid for.

Transferrable skills, such as communication and human relations, are specific to particular careers and cannot be applied to various job types.

Having a broad skill base can limit career choices and flexibility in the job market.

Hard skills primarily refer to character qualities and competencies.

Career coaching is not a valuable resource for individuals in career planning.

Lifestyle trade-offs involve weighing the demands of specific jobs against social and cultural preferences.

Taxation is considered the inherent power of the state to collect revenue for public purpose.

The Lifeblood Doctrine, Necessity Theory, and Symbiotic Relationship are concepts related to taxation.

Tax planning involves seeking legal ways to increase taxable income.

Capital Gains Tax is imposed on the gains from the sale, exchange, or disposition of capital assets.

Donor's Tax is imposed on the gratuitous transfer of property between two or more persons living at the time of the transfer.

Excise Tax is applied only to goods manufactured or produced in the Philippines.

Value-Added Tax is considered an indirect tax that can be passed on to the buyer.

Commercial banks can perform underwriting and other functions of investment houses.

Thrift banks primarily focus on providing short-term working capital financing.

Credit is any arrangement in which goods, services, or money are received in exchange for a promise to repay at a later date.

Retirement planning is the process of ensuring that you have enough financial resources to support yourself during retirement.

Estate planning involves making arrangements for the distribution of your assets and the care of dependents after your death.

Property insurance primarily covers losses related to health care expenses.

Liability insurance is designed to protect against financial loss due to damage or injury you cause to others.

Risk management is the process of identifying, assessing, and prioritizing potential risks and taking steps to mitigate or minimize them.

A health care plan is a generic name for any program that pays for or provides reimbursement for health care expenses.

Many people obtain a health care plan through a group health plan, typically through their employer.

HMO stands for "Health Maintenance Organization," which typically offers a network of doctors and hospitals for members to choose from.

Computing needed life insurance involves calculating the amount of coverage required to protect your loved ones financially in the event of your death.

Term insurance provides coverage for a specific term or period and does not have a cash value component.

UITF, Mutual Funds, and VUL are generally considered as passive investments.

Active investing involves frequent buying and selling of securities to maximize returns.

Passive investors typically have a long-term investment horizon and do not actively trade securities.

Stocks represent ownership in a company and are considered a form of equity investment.

Bonds are debt securities where investors lend money to an issuer in exchange for periodic interest payments.

A portfolio is a collection of different investments held by an individual or entity.

The return on an investment is solely based on financial risk and does not consider other factors.

Income from investments can include interest, rent, and dividends.

Capital gains or losses do not occur until you actually sell an investment.

Total return is the sum of current income and capital gains from investments.