|Name: _________________________||Period: ___________________|
This test consists of 15 multiple choice questions and 5 short answer questions.
Multiple Choice Questions
1. What is the crossover point?
(a) When the amount of investment income is as high as normal monthly expenses.
(b) When the amount of investment income is lower than normal monthly expenses.
(c) When the amount of total income is as high as normal monthly expenses.
(d) When the amount of total income is lower than normal monthly expenses.
2. What may reaching the crossover point cause participants to do?
(a) Explore other routes to work.
(b) Continue working or choose a new job.
(c) Start a new wall chart.
(d) Increase spending.
3. When can program participants consider retirement?
(a) When total income exceeds expenses.
(b) After working for 20 years in the same field.
(c) After reaching the crossover point.
(d) At age 65.
4. What is the main purpose of the wall chart?
(a) To define commitment to the program.
(b) Keep finances on the person's mind, to help them make more conscious choices when spending money.
(c) To replace the monthly chart created previously.
(d) To define values and purpose.
5. What should participants do if they don't make a living from their passion?
(a) Abandon their passion until retirement.
(b) Find a new passion.
(c) Find a new job.
(d) Follow their passion unpaid.
6. What should people do with their extra money, once they earn more per month than they spend?
(a) Turn it into an interest-bearing investment.
(c) Work fewer hours per week.
(d) Purchase a long-desired luxury.
7. What is the most important strategy in following Step 7?
(a) Following a passion.
(b) Choosing a job with high pay.
(c) Reducing monthly expenses.
(d) Conserving life energy.
8. What should people do about unusual extra expenses, such as medical bills or birthday parties?
(a) Create an extra chart to track them.
(b) Categorize them as "gazingus pins."
(c) Avoid them whenever possible.
(d) Accept them as a normal part of financial life.
9. What is the best thing to do with the interest received?
(a) Purchase a larger home as a hedge against inflation.
(b) Put the money under a mattress for a rainy day.
(c) Reinvest it.
(d) Purchase rental properties.
10. What do the authors describe as "having a high joy-to-stuff ratio?"
(b) Life energy.
(c) Being frugal.
11. How does the realization that not all work is paid add life to retirement?
(a) Retired people know they can still be useful.
(b) People who do not work after retirement have fewer health problems.
(c) Retired people are happy because they no longer work.
(d) People who do not work after retirement live longer.
12. What should frugal people research before purchasing items?
(a) Color, style, and multiple use.
(b) Value, quality, and availability.
(c) Value, quality, durability, and multiple use.
(d) Popularity, quality, durability, and multiple use.
13. What generally happens to monthly expenses, when tracked by program participants?
(a) They gradually increase.
(b) They trend up or down along with income.
(c) They gradually decrease.
(d) They settle into a certain range.
14. What percentage of useful life objects could people add if they were not so anxious to replace them?
(a) Ten percent.
(b) Fifty to eighty percent.
(c) Twenty to fifty percent.
(d) One hundred percent.
15. How should investment income be tracked?
(a) Separately from other income.
(b) Subtracted from monthly expenses.
(c) Combined with other income.
(d) Combined with monthly expenses.
Short Answer Questions
1. If people earn more than the minimum needed to pay bills, what should they do with the extra money?
2. What should retired people do with their excess monthly income?
3. How should program participants adjust their medical insurance?
4. What is one advantage of estimating the likely timing of the crossover point?
5. A person's crossover point is an estimate based on which type of expenses?
This section contains 681 words
(approx. 3 pages at 300 words per page)