Someone choosing to save in a way that money will be used for what the individual considers to be a good purpose.
7 of 27
What religious belief affects finance.
Islamic law (Sharia)- doesn't allow payment of interest on debt
8 of 27
Topic 2
Why do people save?
To finance future needs, wants and aspirations
9 of 27
What is Captial growth?
The market value of interest is greater when sold than the amount they paid for it.
10 of 27
Summaries savings
held at financial service providers, earn interest, the capital sum isn't at risk.
11 of 27
Summaries investments
High risk as value depends on assets, higher return, possible to earn no or little return.
12 of 27
What would someone who wants Capital growth do?
Chose an investment product that will reinvest the returns in order to grow more funds.
13 of 27
List 4 investment products.
Stocks and shares
Stocks and shares ISA
Corporate and government bonds
Property
14 of 27
The recommended amount of time to have money in stocks and shares ISA
5 years as value fluctuates and investors need time.
15 of 27
Why do companies and the government issue bonds?
They need to borrow money.
16 of 27
Why is property seen as an investment?
If you downsize you can receive a large profit.
17 of 27
What are commodities?
Gold
Silver
Works of art
Antiques
Fine wine
18 of 27
Why are commodities so risky?
Can offer very high capital gains but are risky as only really suitable for very rich or experienced buyers and know what has value.
19 of 27
What are collective investments
Specialist organisations that carry out investments on behalf of clients with money to invest.
20 of 27
Disadvantages of collective investments
Risk is reduced so profit is lower
pricey
21 of 27
Summaries unit trusts (CI)
Most common,
often used if the person is inexperienced
Managers are responsible for investing and trustees are responsible for making sure manger comply with the trust deeds.
22 of 27
Summaries investment trusts
Common
actually public limited companies
trade shares on the stock market
23 of 27
Summaries open-ended investment company funds (OEICs)
Cross between unit trusts and investment trusts
corporate structure
Managed by an authorized corporate direct(similar to the manager of trust units)
24 of 27
What is term assurance
an insuranceruns plan that runs for a fixed period of time and pays a lump sum if the person dies during the term.
25 of 27
What is an endowment policy
Life insurance contract that pays a sum after a specified term or if the person dies before date.Technically long-term savings
26 of 27
What an annuity product
provides fixed income for a number of years.
27 of 27
Other cards in this set
Card 2
Front
What is investments?
Back
Longer-term savings that is risky but can bring a higher return.
Card 3
Front
What is a pension?
Back
Card 4
Front
What is longer-term borrowing?
Back
Card 5
Front
Internal factors that influence needs, wants, and aspirations
Comments
No comments have yet been made