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Take the following quiz to find out if you have the knowledge to be financially empowered to take control over your financial future. Answer True or False to each question, then tabulate your scoring at the end. ____I know the current value of my home, including the size of the mortgage and the amount of equity I’ve build. ____I know the length of the mortgage-payment schedule and how much extra it would cost each month to pay down the mortgage in half the time. I also know the interest rate I am paying on the mortgage and if it is competitive in today’s market. ____I know how much life insurance I (and my spouse, if applicable) carry. I know how much cash value there is in the policy, and I know the rate of return cash value is earning. ____I know the details (including amount of coverage, cost, monthly or yearly payment, etc.) of all other insurance policies carried by me (and my spouse, if applicable). This includes health, disability, term life, and so on. ____I have reviewed my life-insurance policy in the last 12 to 24 months to see if the price I am paying for it is still competitive in today’s marketplace. ____If I own my own home, I know what kind of homeowner’s coverage I have and what the deductibles are. If I rent, I know the amount of renter’s insurance I have and what its deductible is. In either case, in the event of a fire or other catastrophic loss, I know whether my insurance will reimburse me for the actual cash value of my property or the cost of replacing it at today’s current value. ____I have attempted to protect my family’s nest egg from lawsuits by carrying an “umbrella” insurance policy that includes liability coverage. ____I either prepared my own tax return this year or reviewed my tax situation with the person who prepared my return. ____I know the location and amounts of all my or my family’s investments, including:
____I know the annualized return generated by each of the above investments. ____If I or my family owns a business, I know the
current valuation of the business, including how much debt it currently carries
and the value of its liquid assets. ____I know the value, location, and performance of all my retirement accounts (and those of my spouse, if applicable), including IRAs, SEP-IRAs Keoghs, and company pension plans. ____I know if I am making the maximum allowable contribution to my retirement plan at work, whether my employer is making matching contributions, and what the vesting schedule is. ____I know whether my (and my spouse, if applicable) income is protected should I (or my spouse) become disabled because I own disability insurance. In addition, I know what the exact coverage is, when the benefits would start, and whether the benefits would be taxable. ____I (or my family) maintain a safety deposit box, know how to gain access to it, and have reviewed its contents within the last 12 months. If I have the only key, other family members know where to find it if something should happen to me. SCORING: Give yourself 1 point for every time you answered “true” and 0 for every time you answered “false”. 14-17 points: Excellent! You have a good grasp of where your money is. 9-13 points:
You’re not totally in the dark, but there are some
areas
in which knowledge is less than adequate. Under 9 points: Your chances of being hurt financially because your insufficient knowledge are enormous. You need to learn how to protect yourself from future financial disaster. |
