Turn Money Fear into Money Fun

You are an intelligent woman, but, all of a sudden, you freeze when it comes to an unfamiliar financial term.

As a family financial expert for over 35 years, Ive seen women decide to push off handling their finances until they become familiar with the money terms theyve heard.  So, when do you roll-up with your phone or tablet at night and say, Hey, I want to look up the term prospectus and see what that means? Let me take a guess: Never.

If you want to learn some important financial terms while having a little fun, Ive developed a quiz that you can take.  The quiz is directed at women because we tend to be more thorough than men when it comes to understanding things before we act. The purpose is to show you that, if someone just took the time to explain the term, your reaction would be, That is it? Yes, that is it!  I dont want these, or any other terms, to impede your financial success.

The Only Investment Quiz Youll Ever Need Sort Of

Have fun with the quiz below.  Hopefully, you will see that the definitions are not as daunting as they sound. and you can easily learn them.

Leverage is:

  1. The gearshift in a sports car.
  2. The method the Egyptians used to move those humongous rocks to build the Pyramids.
  3. Debt.

Stock is*:*

  1. A base for soup.
  2. Large animals that John Wayne used to herd together when he was driving them north to the railroad.
  3. A part ownership in a corporation. There are two main types of stock: common and preferred. Common stock typically allows the owner to vote at shareholders meetings and to receive dividends that are based on the profitability of the company. Preferred stock generally does not let people vote.  In most cases, preferred stock pays an agreed-upon dividend that makes them similar to bonds. Both types trade through brokerage firms.

Face Value is:

  1. How you feel after an expensive facial.
  2. When you stand out on the sidewalk and stare directly at the diamond necklace you want to buy.
  3. A term used for stocks and bonds.  For stocks, face value refers to the original cost of the stock.  For bonds, it is the amount paid to the bond owner (holder) when the bond matures.  Face value is also known as par value.

A Prospectus is:

  1. An online date.
  2. An old man with a white beard who wanders around the mountains leading a burro and looking for gold.
  3. A formal legal document that is required to be filed with the SEC (Securities and Exchange Commission). It describes an investment that will be sold to the public.

A mutual fund is:

  1. A party in a hot tub.
  2. Two women splitting the tab at lunch.
  3. A company that pools money from investors and then invests that money for them in a basket of investments. There are all kinds of mutual funds and they can invest in many types of securities, such as; stocks, bonds, short-term debt, etc.  The funds are managed by investment professionals called portfolio managers, and for that, they are paid a fee (which is part of your fees). Investors can buy and sell shares in the mutual funds.

Dollar cost averaging is:

  1. Spending an extra $50 on something you dont need in order to get a free item you dont want.
  2. Ten women splitting the tab at lunchone of them only had a salad.
  3. It is a simple investing technique. For instance, you decide on a dollar amount to invest each month, and you ignore the stock price.  By definition, you buy more shares of that stock or investment when the prices are low and less when the prices go up.  This investment strategy keeps you from the panic to sell when shares are falling in price and buying when they are going up.

Diversification is:

  1. When two people get together to write a poem.
  2. Imelda Marcos shoe closet.
  3. An investing principle that encourages you to buy different types of investments to avoid putting all of your eggs, or risk in one basket.

A bond is:

  1. When you and your partner read Fifty Shades of Grey.
  2. Daniel Craigs original 007 movie.
  3. It is a loan you make to a corporation or the government. When you own a bond, you become a creditor. Bonds are debt of the company or government entity that is issued for more than a year and for which you are paid interest

Laddering is:

  1. What you use if your cat is stuck on the roof.
  2. A big run in your new silk blouse.
  3. It is an investment technique that allows you to stagger the maturities of bonds. For instance, in retirement, you may not want all of your money to mature all at once, so you select different maturity dates so the money is staggered in as you need it.

A load is:

  1. A pile of rocks.
  2. What you expect might be there when you say, Honey, isnt it your turn to change the babys diaper?
  3. A fee charged to an investor when you buy or sell a mutual fund. The fee could be a one-time charge when you buy-in (front-end load), when you sell (back-end load) or on an annual basis.

How Did You Score?

If most of your answers were (1), you have a warped sense of humor.  If most of your answers were (2), you need to get out more, and if most of your answers were (3), you should be confident with your money awareness and make sure that you are using that to design and manage your financial life.

Comments (2)
No. 1-2

Whenever I am overwhelmed by my broker's financial advice and feel particularly dense I go back and take this quiz and I can once again ask my broker to explain in plain language what he is talking about. Thank you.


I can't believe it! I understand what these investment terms mean and I am still smiling.

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