Spotlight: Basic Financial Concepts
Whether it’s knowing how government policy proposals might impact your spending decisions or how interest on a loan you are considering is calculated, understanding basic financial concepts helps you make the best choices for achieving your long-term goals.
Others in this Series
Understand What “The Fed” Does
Learn how the actions of the U.S. central bank can influence your financial options.
Interest: Earning vs. Paying
Knowing the difference between simple and compound interest is critical to building wealth.
The Two Sides of Inflation
While inflation reduces the power of your dollar, it does have its benefits.
The Difference Between Fiscal and Monetary Policy
The government uses these two “macro” tools to keep the U.S. economy on track; understand how changes in these policies can affect your decisions.
Learn More About Our Essentials Curriculum
This curriculum – which can be customized to your family’s unique objectives – empowers the next generation to responsibly steward family wealth. Each month we will spotlight a topic from our Essentials curriculum.
Did you know?
To help mitigate the economic impact of COVID-19, the Fed announced several emergency actions
In addition to cutting interest rates to a level close to zero in March 2020, the Fed also purchased securities and established new lending and funding programs in order to help stabilize the U.S. economy.
When the Fed cuts rates, it benefits borrowers, but hurts savers
Lower interest rates make borrowing and spending more attractive, and saving less rewarding, which helps support economic growth.
China has the second highest GDP in the world
But with the world’s largest population, it has a low per capita GDP, so it is still considered an “emerging market” country.
LOWER FEDERAL FUNDS RATES CAN ENCOURAGE ECONOMIC GROWTH IN UNCERTAIN TIMES
What You Will Learn in a Customized Session
How different types of interest rates work (Fed Funds Rate, Prime Rate, APR, APY)
How the Federal Reserve influences consumer and business lending rates
The impact inflation has on your purchasing power
Why creating a framework helps you achieve your goals even as they evolve over time
Why understanding the difference between compound and simple interest calculations matters
How to calculate the future value of an investment using present value, interest rate and time period
How to determine your net worth
Empower Your Family with Financial Education
Successful wealth management requires a fundamental understanding of personal finance, investing and estate planning. Let us design a custom financial education program for your family.
This information is not intended to be and should not be treated as legal, investment, accounting or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting or tax advice from their own counsel. All information discussed herein is current only as of the date appearing in this material and is subject to change at any time without notice.
The Northern Trust Company | Member FDIC | Equal Housing Lender