FI Quarter 1 Benchmark Review

Financial Independence (“FI”) is achieved when

• Passive Income + Sustainable Asset Withdrawal < Living Expenses

• Passive Income + Sustainable Asset Withdrawal > Living Expenses

• Passive Income + Sustainable Asset Withdrawal > Net Worth

• Passive Income + Sustainable Asset Withdrawal < Net Worth

How do you calculate Net Worth?

• Earned Income - Passive Income = Net Worth

• Assets - Liabilities = Net Worth

• Earned Income + Passive Income = Net Worth

• Assets + Liabilities = Net Worth

Upon retirement, many experts recommend withdrawing no more than _____ % from your life savings each year.

• 1%

• 4%

• 10%

• 20%

An individual reaches “FI” when they DO NOT depend on what type of income to pay for their living expenses?

• Earned Income

• Passive Income

• Portfolio Income

• Side Hustles

Which of the following is NOT a strategy for reaching “FI” sooner?

• Buy a nicer car

• Cut back on spending

• Save/invest more money

• Work a side hustle or second job

During the Covid Pandemic, the US government printed off trillions of dollars and gave out thousands of dollars in “stimulus” checks to every American to help make up for them not working. How should this action affect prices?

• Prices would drop as a result

• Prices would rise as a result

• Prices would stay the same

• It is impossible to predict what might happen to prices when the government prints trillions of dollars out of thin air

If my bank account earns 1% and inflation rises by 3%, what is the real return on my investment?

• -4%

• -2%

• 2%

• 4%

Inflation is defined as the general _________

• Decrease in prices

• Drop in real estate value

• Increase in prices

• Rise in stock market value

In the fall of 2023, the US inflation rate sat around 3%. This is considered a/an ______ level of inflation.

• Normal

• Unusually high

• Unusually low

Imagine the average grocery bill for American consumers was $100. A year later after inflation averaged 8%/year, what would the average grocery bill be that next year?

• $100.80

• $108.00

• $180.00

• $800.00