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| """ | |
| Create Finance Knowledge Base | |
| Builds a FAISS vector database with comprehensive financial knowledge including: | |
| - Financial concepts (stocks, bonds, ETFs, mutual funds, etc.) | |
| - Investment strategies and portfolio management | |
| - Tax concepts and regulations | |
| - Market analysis and indicators | |
| - Financial planning and goal setting | |
| """ | |
| import os | |
| from dotenv import load_dotenv | |
| from langchain_openai import OpenAIEmbeddings | |
| from langchain_community.vectorstores import FAISS | |
| from langchain_core.documents import Document | |
| load_dotenv() | |
| # Initialize embeddings | |
| embeddings = OpenAIEmbeddings(api_key=os.getenv("OPENAI_API_KEY")) | |
| # ==================== KNOWLEDGE BASE CONTENT ==================== | |
| # Financial Concepts | |
| financial_concepts = [ | |
| """ | |
| **Stock** is a type of security that represents ownership in a corporation. | |
| - Stock owners (shareholders) are entitled to a portion of the company's assets and earnings | |
| - Two main types: Common stock (voting rights) and Preferred stock (priority dividends) | |
| - Traded on stock exchanges like NYSE, NASDAQ | |
| - Price determined by supply and demand, company performance, market conditions | |
| - Capital gains occur when stock price increases; dividends provide regular income | |
| - Risk: Stock prices can be volatile and may lose value | |
| """, | |
| """ | |
| **Bond** is a fixed-income investment representing a loan made by an investor to a borrower. | |
| - Issuer (borrower) pays periodic interest (coupon) and returns principal at maturity | |
| - Types: Government bonds (Treasury), Corporate bonds, Municipal bonds | |
| - Generally lower risk than stocks but lower potential returns | |
| - Bond prices inversely related to interest rates | |
| - Credit rating affects bond yield and risk (AAA is highest quality) | |
| - Used for income generation and portfolio diversification | |
| """, | |
| """ | |
| **ETF (Exchange-Traded Fund)** is a basket of securities that trades on an exchange like a stock. | |
| - Offers diversification by holding multiple stocks, bonds, or other assets | |
| - Lower fees than mutual funds (typically 0.03% - 0.25%) | |
| - Can be bought/sold throughout trading day at market price | |
| - Popular types: S&P 500 ETFs (SPY, VOO), Bond ETFs, Sector ETFs | |
| - Tax-efficient due to creation/redemption mechanism | |
| - Examples: VOO (Vanguard S&P 500), QQQ (Nasdaq 100), AGG (Bond Aggregate) | |
| """, | |
| """ | |
| **Mutual Fund** is a pooled investment vehicle managed by professional fund managers. | |
| - Investors buy shares of the fund, which invests in diversified portfolio | |
| - Priced once per day after market close (NAV - Net Asset Value) | |
| - Higher fees than ETFs (expense ratios typically 0.5% - 2%) | |
| - Active management (managers pick stocks) or passive (index funds) | |
| - Minimum investment requirements (often $1,000 - $3,000) | |
| - Examples: Vanguard 500 Index Fund, Fidelity Contrafund | |
| """, | |
| """ | |
| **Diversification** is the practice of spreading investments across different assets to reduce risk. | |
| - "Don't put all eggs in one basket" - reduces exposure to any single investment | |
| - Diversify across asset classes (stocks, bonds, real estate, commodities) | |
| - Diversify within asset classes (different sectors, company sizes, countries) | |
| - Modern Portfolio Theory: Optimal diversification improves risk-adjusted returns | |
| - Reduces unsystematic risk (company-specific) but not systematic risk (market-wide) | |
| - Recommended: 60/40 stock/bond allocation for moderate risk, adjust based on age | |
| """, | |
| """ | |
| **Asset Allocation** is the strategy of dividing investment portfolio among different asset categories. | |
| - Primary asset classes: Stocks (equities), Bonds (fixed income), Cash, Real estate | |
| - Determines 90% of portfolio performance variation over time | |
| - Age-based rule: Stock allocation = 110 - your age (e.g., age 30 β 80% stocks) | |
| - Aggressive: 80-100% stocks, Moderate: 60% stocks/40% bonds, Conservative: 40% stocks/60% bonds | |
| - Rebalance annually to maintain target allocation | |
| - Adjust based on risk tolerance, time horizon, financial goals | |
| """, | |
| """ | |
| **Dollar-Cost Averaging (DCA)** is investing fixed amounts at regular intervals regardless of price. | |
| - Reduces impact of market volatility and timing risk | |
| - Example: Invest $500 monthly instead of $6,000 lump sum | |
| - Buys more shares when prices low, fewer when prices high | |
| - Psychologically easier than trying to time the market | |
| - Ideal for 401(k) contributions and regular investing | |
| - May underperform lump-sum investing in rising markets | |
| """, | |
| """ | |
| **Index Fund** is a mutual fund or ETF designed to track a specific market index. | |
| - Passive management: Simply matches index holdings, no active stock picking | |
| - Very low fees (often 0.03% - 0.20%) | |
| - Examples: S&P 500 index funds, Total Stock Market index funds | |
| - Consistently outperforms most actively managed funds over long term | |
| - Warren Buffett recommends index funds for most investors | |
| - Popular: Vanguard Total Stock Market (VTI), S&P 500 (VOO, SPY) | |
| """, | |
| """ | |
| **401(k)** is an employer-sponsored retirement savings plan with tax advantages. | |
| - Contributions reduce taxable income (traditional) or grow tax-free (Roth) | |
| - 2024 contribution limit: $23,000 ($30,500 if age 50+) | |
| - Many employers offer matching contributions (free money!) | |
| - Withdrawal penalty if taken before age 59Β½ (10% + taxes) | |
| - Required Minimum Distributions (RMDs) start at age 73 | |
| - Always contribute enough to get full employer match | |
| """, | |
| """ | |
| **IRA (Individual Retirement Account)** is a tax-advantaged retirement account. | |
| - Traditional IRA: Tax-deductible contributions, taxed upon withdrawal | |
| - Roth IRA: After-tax contributions, tax-free qualified withdrawals | |
| - 2024 contribution limit: $7,000 ($8,000 if age 50+) | |
| - Roth IRA income limits: $161,000 single, $240,000 married (2024) | |
| - Withdrawals before 59Β½ may incur penalties | |
| - Roth IRA has no RMDs during owner's lifetime | |
| """, | |
| """ | |
| **Compound Interest** is earning interest on both principal and accumulated interest. | |
| - "The most powerful force in the universe" - Einstein (allegedly) | |
| - Formula: A = P(1 + r/n)^(nt) where P=principal, r=rate, n=compounds/year, t=years | |
| - Example: $10,000 at 8% for 30 years = $100,627 | |
| - Time is crucial: Starting 10 years earlier can double retirement savings | |
| - Applies to investments, savings, and debt (credit cards compound against you) | |
| - Key to long-term wealth building | |
| """, | |
| """ | |
| **Expense Ratio** is the annual fee charged by mutual funds and ETFs. | |
| - Expressed as percentage of assets (e.g., 0.10% = $10 per $10,000 invested) | |
| - Directly reduces investment returns every year | |
| - 1% difference in fees can cost hundreds of thousands over lifetime | |
| - Index funds: 0.03% - 0.20%, Active funds: 0.50% - 2.00% | |
| - Lower is better - every 0.10% matters over decades | |
| - Total market ETFs often have lowest ratios (0.03% - 0.04%) | |
| """, | |
| """ | |
| **Capital Gains** is profit from selling an asset for more than purchase price. | |
| - Short-term: Held β€1 year, taxed as ordinary income (10%-37%) | |
| - Long-term: Held >1 year, preferential tax rates (0%, 15%, or 20%) | |
| - 2024 long-term rates: 0% up to $44k single/$89k married, 15% up to $492k/$553k, 20% above | |
| - Capital losses can offset gains (tax-loss harvesting strategy) | |
| - $3,000 annual limit for deducting losses against ordinary income | |
| - Hold investments >1 year when possible for tax efficiency | |
| """, | |
| """ | |
| **Dividend** is a portion of company profits paid to shareholders. | |
| - Paid quarterly by many large, established companies | |
| - Dividend Yield = Annual dividend / Stock price (e.g., 3% yield) | |
| - Qualified dividends taxed at capital gains rates (0%, 15%, 20%) | |
| - Dividend aristocrats: Companies increasing dividends 25+ consecutive years | |
| - Dividend stocks provide income but may have lower growth | |
| - Examples: Coca-Cola, Johnson & Johnson, Procter & Gamble | |
| """, | |
| """ | |
| **P/E Ratio (Price-to-Earnings)** measures stock valuation relative to earnings. | |
| - Formula: Stock Price / Earnings Per Share | |
| - S&P 500 historical average: ~16-17 | |
| - High P/E (>25): Stock may be overvalued or high-growth expectations | |
| - Low P/E (<15): Stock may be undervalued or facing challenges | |
| - Compare P/E to industry peers and company's historical average | |
| - Limitations: Doesn't account for growth, debt, or industry differences | |
| """, | |
| """ | |
| **Market Capitalization** is total value of company's outstanding shares. | |
| - Formula: Current Stock Price Γ Total Shares Outstanding | |
| - Large-cap: >$10B (Microsoft, Apple), more stable, lower growth | |
| - Mid-cap: $2B-$10B, balance of growth and stability | |
| - Small-cap: $300M-$2B, higher growth potential, higher volatility | |
| - Micro-cap: <$300M, very high risk | |
| - Diversify across market caps for balanced portfolio | |
| - S&P 500 contains large-cap stocks | |
| """, | |
| """ | |
| **Bull Market** is a period of rising stock prices and investor optimism. | |
| - Typically defined as 20%+ increase from recent low | |
| - Characterized by strong economy, low unemployment, investor confidence | |
| - Average bull market lasts 4-5 years (historically) | |
| - Strategy: Stay invested, maintain discipline, avoid overconfidence | |
| - Don't try to predict the top - remain diversified | |
| - Historic examples: 2009-2020 (longest bull market) | |
| """, | |
| """ | |
| **Bear Market** is a period of falling stock prices and pessimism. | |
| - Typically defined as 20%+ decline from recent high | |
| - Caused by recession, high inflation, economic crisis, pandemic | |
| - Average bear market lasts 9-18 months | |
| - Strategy: Don't panic sell, continue investing (stocks on sale) | |
| - Historically, markets always recover and reach new highs | |
| - Historic examples: 2008 financial crisis, 2020 COVID crash | |
| """, | |
| """ | |
| **Recession** is a significant decline in economic activity lasting several months. | |
| - Technical definition: Two consecutive quarters of negative GDP growth | |
| - Indicators: Rising unemployment, declining consumer spending, business closures | |
| - Average recession lasts 10-18 months | |
| - Stock market often declines before recession begins (leading indicator) | |
| - Investment strategy: Maintain course, consider defensive stocks, bonds | |
| - Historically occurs every 5-10 years | |
| """, | |
| """ | |
| **Inflation** is the rate at which general prices for goods and services rise. | |
| - Measured by CPI (Consumer Price Index) and PCE (Personal Consumption Expenditures) | |
| - Federal Reserve targets 2% annual inflation | |
| - High inflation (>4%) erodes purchasing power and savings | |
| - Deflation (negative inflation) can harm economy | |
| - Stocks and real estate historically outpace inflation long-term | |
| - TIPS (Treasury Inflation-Protected Securities) adjust for inflation | |
| """, | |
| """ | |
| **Federal Reserve (The Fed)** is the central banking system of the United States. | |
| - Sets monetary policy to promote maximum employment and price stability | |
| - Primary tool: Federal Funds Rate (interest rate for bank lending) | |
| - Raising rates: Slows economy, fights inflation, may lower stock prices | |
| - Lowering rates: Stimulates economy, may boost stocks, increases inflation risk | |
| - FOMC (Federal Open Market Committee) meets 8 times per year | |
| - Fed decisions significantly impact all financial markets | |
| """, | |
| """ | |
| **Interest Rate** is the cost of borrowing money or return on savings/bonds. | |
| - Set by Federal Reserve (Fed Funds Rate) influences all other rates | |
| - Higher rates: Savings accounts pay more, bonds attractive, stocks may fall | |
| - Lower rates: Cheaper borrowing, stocks more attractive, savings earn less | |
| - Mortgage rates, auto loans, credit cards all follow Fed rate direction | |
| - Bond prices inversely related to rates (rates β, bond prices β) | |
| - Affects your investment returns, loan costs, retirement planning | |
| """, | |
| """ | |
| **Risk Tolerance** is your ability and willingness to endure investment losses. | |
| - Factors: Age, income, financial goals, personality, investment timeline | |
| - High risk tolerance: Can handle volatility, longer time horizon (20+ years) | |
| - Low risk tolerance: Prefer stability, shorter timeline, near retirement | |
| - Questionnaire helps determine: conservative, moderate, or aggressive | |
| - Risk capacity (financial ability) may differ from risk appetite (emotional comfort) | |
| - Match portfolio allocation to risk tolerance (aggressive = more stocks) | |
| """, | |
| """ | |
| **Emergency Fund** is savings reserved for unexpected expenses or income loss. | |
| - Recommended: 3-6 months of living expenses | |
| - Keep in high-yield savings account (HYSA) - currently 4-5% APY | |
| - Must be liquid (easily accessible) - not invested in stocks | |
| - First financial priority before investing | |
| - Prevents needing to sell investments at wrong time or use high-interest debt | |
| - Examples: Job loss, medical emergency, car/home repairs | |
| """, | |
| """ | |
| **Rebalancing** is adjusting portfolio back to target asset allocation. | |
| - Example: 60/40 stocks/bonds becomes 70/30 after stocks rise β sell stocks, buy bonds | |
| - Enforces "buy low, sell high" discipline | |
| - Recommended frequency: Annually or when allocation drifts 5%+ | |
| - Methods: Sell winners/buy losers, or direct new contributions to lagging assets | |
| - In tax-advantaged accounts (401k, IRA) to avoid capital gains taxes | |
| - Maintains desired risk level and prevents overexposure | |
| """, | |
| """ | |
| **Tax-Loss Harvesting** is selling investments at a loss to offset capital gains. | |
| - Reduces tax burden by offsetting gains with losses | |
| - Can deduct up to $3,000 in net losses against ordinary income annually | |
| - Excess losses carry forward to future years indefinitely | |
| - Wash sale rule: Can't buy "substantially identical" security within 30 days | |
| - Best done in taxable brokerage accounts (not IRAs/401ks) | |
| - Automated by robo-advisors like Betterment, Wealthfront | |
| """, | |
| """ | |
| **Roth Conversion** is transferring money from traditional IRA to Roth IRA. | |
| - Pay taxes now on converted amount at current tax rate | |
| - Future withdrawals completely tax-free (qualified distributions) | |
| - Strategic during low-income years or when tax rates low | |
| - No income limits for conversions (unlike Roth IRA contributions) | |
| - Consider tax bracket impact - may push into higher bracket | |
| - Five-year rule: Each conversion has 5-year clock for penalty-free withdrawal | |
| """, | |
| """ | |
| **HSA (Health Savings Account)** is a triple-tax-advantaged medical savings account. | |
| - Requires high-deductible health plan (HDHP) | |
| - 2024 limits: $4,150 individual, $8,300 family (+$1,000 if 55+) | |
| - Triple tax benefit: Tax-deductible contributions, tax-free growth, tax-free medical withdrawals | |
| - Can invest HSA funds in stocks/bonds like IRA | |
| - No "use it or lose it" - funds roll over indefinitely | |
| - After 65, can withdraw for non-medical (taxed like traditional IRA) | |
| """, | |
| """ | |
| **Backdoor Roth IRA** is a strategy for high-income earners to contribute to Roth IRA. | |
| - Step 1: Contribute to traditional IRA (non-deductible) | |
| - Step 2: Immediately convert to Roth IRA | |
| - Bypasses Roth IRA income limits ($161k single, $240k married in 2024) | |
| - Pro-rata rule: If you have pre-tax IRA money, conversion partially taxable | |
| - Requires careful execution and tax reporting | |
| - Legal strategy explicitly allowed by IRS | |
| """, | |
| """ | |
| **Mega Backdoor Roth** is advanced strategy to contribute large amounts to Roth accounts. | |
| - Use after-tax 401(k) contributions beyond normal $23,000 limit | |
| - Total 401(k) limit: $69,000 in 2024 (including employer match) | |
| - Convert after-tax contributions to Roth 401(k) or Roth IRA | |
| - Not all 401(k) plans allow this - check plan rules | |
| - Can contribute $46,000+ additional to Roth annually if available | |
| - Complex but powerful for high earners with access | |
| """, | |
| ] | |
| # Investment Strategies | |
| investment_strategies = [ | |
| """ | |
| **Buy and Hold Strategy** is investing for long term without frequent trading. | |
| - Core principle: Time in market beats timing the market | |
| - Reduces transaction costs, taxes, and emotional decisions | |
| - Ignore short-term volatility and market noise | |
| - S&P 500 historical return: ~10% annually over long periods | |
| - Best for index fund investors and retirement accounts | |
| - Warren Buffett's favorite strategy | |
| """, | |
| """ | |
| **Three-Fund Portfolio** is a simple diversification strategy using just 3 index funds. | |
| - Fund 1: Total US Stock Market (e.g., VTI, VTSAX) - 60% | |
| - Fund 2: Total International Stock (e.g., VXUS, VTIAX) - 30% | |
| - Fund 3: Total Bond Market (e.g., BND, VBTLX) - 10% | |
| - Adjust percentages based on age and risk tolerance | |
| - Extremely low cost, simple to manage, well-diversified | |
| - Popularized by Bogleheads investment philosophy | |
| """, | |
| """ | |
| **Target-Date Fund** is an all-in-one fund that adjusts allocation as target date approaches. | |
| - Automatically becomes more conservative over time (glide path) | |
| - Example: 2060 Target Date fund (for ~2060 retirement) | |
| - Young: 90% stocks, 10% bonds β Near retirement: 30% stocks, 70% bonds | |
| - Extremely simple - one fund for entire retirement | |
| - Slightly higher fees than DIY three-fund portfolio (0.12% vs 0.04%) | |
| - Popular in 401(k) plans - good "set and forget" option | |
| """, | |
| """ | |
| **Value Investing** is buying undervalued stocks trading below intrinsic value. | |
| - Focus on low P/E ratios, high dividend yields, strong fundamentals | |
| - Philosophy: Market overreacts, creating opportunities | |
| - Famous practitioners: Warren Buffett, Benjamin Graham | |
| - Look for strong balance sheets, consistent earnings, competitive advantages | |
| - Requires patience - may underperform during growth stock rallies | |
| - Value stocks historically outperform long-term but more cyclical | |
| """, | |
| """ | |
| **Growth Investing** is buying companies expected to grow faster than market average. | |
| - Characteristics: High P/E ratios, revenue growth, innovation | |
| - Often tech companies (historically): Amazon, Apple, Google, Tesla | |
| - Higher risk and volatility than value stocks | |
| - May not pay dividends (reinvest profits for growth) | |
| - Can outperform dramatically in bull markets | |
| - More sensitive to interest rate changes | |
| """, | |
| """ | |
| **4% Rule** is retirement withdrawal strategy to make savings last 30 years. | |
| - Withdraw 4% of portfolio in first year of retirement | |
| - Adjust subsequent withdrawals for inflation | |
| - Example: $1M portfolio β $40,000 first year withdrawal | |
| - Based on historical success rates (95% success over 30 years) | |
| - More conservative: 3-3.5% rule for longer retirements | |
| - Adjust based on market conditions and spending needs | |
| """, | |
| ] | |
| # Tax Concepts | |
| tax_concepts = [ | |
| """ | |
| **Standard Deduction** is the fixed amount reducing taxable income without itemizing. | |
| - 2024: $14,600 single, $29,200 married filing jointly | |
| - Most taxpayers use standard deduction (simpler) | |
| - Itemize only if deductions exceed standard deduction | |
| - Common itemized deductions: Mortgage interest, state taxes (SALT), charitable donations | |
| - Standard deduction indexed to inflation annually | |
| - Simplifies tax filing for most Americans | |
| """, | |
| """ | |
| **Tax Brackets** are ranges of income taxed at increasing rates (progressive taxation). | |
| - 2024 Federal brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37% | |
| - Only income within bracket taxed at that rate (marginal tax rate) | |
| - Example: Single filer earning $50k pays 10% on first $11k, 12% on $11k-$47k, 22% on rest | |
| - Moving into higher bracket doesn't increase tax on lower income | |
| - Effective tax rate (average) always lower than marginal rate | |
| - Long-term capital gains have separate preferential brackets | |
| """, | |
| """ | |
| **Tax-Advantaged Accounts** are investment accounts with special tax benefits. | |
| - Traditional 401(k)/IRA: Tax deduction now, taxed later | |
| - Roth 401(k)/IRA: Taxed now, tax-free forever | |
| - HSA: Triple tax advantage (deductible, grows tax-free, withdrawals tax-free for medical) | |
| - 529: Tax-free growth and withdrawals for education | |
| - Priority: Max 401(k) match > IRA/Roth IRA > Max 401(k) > HSA > Taxable brokerage | |
| - Massive long-term tax savings through compound growth | |
| """, | |
| """ | |
| **FICA Taxes** are payroll taxes funding Social Security and Medicare. | |
| - Social Security: 6.2% employee + 6.2% employer (12.4% total) | |
| - Medicare: 1.45% employee + 1.45% employer (2.9% total) | |
| - 2024 Social Security wage cap: $168,600 (Medicare uncapped) | |
| - Additional 0.9% Medicare tax on high earners ($200k+ single, $250k+ married) | |
| - Self-employed pay full 15.3% but get deduction for half | |
| - Separate from income tax - automatically withheld from paychecks | |
| """, | |
| ] | |
| # Market Indicators | |
| market_indicators = [ | |
| """ | |
| **S&P 500** is stock market index tracking 500 largest US companies. | |
| - Represents ~80% of total US stock market value | |
| - Market-cap weighted (larger companies have more influence) | |
| - Top holdings: Apple, Microsoft, Amazon, Google, NVIDIA | |
| - Considered best gauge of overall US stock market health | |
| - Historical return: ~10% annually including dividends | |
| - Popular investment vehicles: SPY, VOO, IVV index funds | |
| """, | |
| """ | |
| **Dow Jones Industrial Average (DJIA)** tracks 30 large US blue-chip companies. | |
| - Price-weighted (higher stock price = more influence, unusual) | |
| - Oldest US market index (created 1896) | |
| - Less representative than S&P 500 (only 30 stocks) | |
| - Includes: Apple, Microsoft, Boeing, Disney, Goldman Sachs | |
| - Frequently cited in media but less useful for investors | |
| - Popular ETF: DIA | |
| """, | |
| """ | |
| **NASDAQ Composite** is index of all stocks listed on NASDAQ exchange. | |
| - Heavy technology concentration (~50% tech stocks) | |
| - Includes: Apple, Microsoft, Amazon, Google, Tesla, Meta | |
| - More volatile than S&P 500 due to growth stock concentration | |
| - Strong indicator of technology sector performance | |
| - Popular tech-focused ETF: QQQ (Nasdaq-100) | |
| - Higher growth potential but higher risk | |
| """, | |
| """ | |
| **VIX (Volatility Index)** measures expected stock market volatility. | |
| - Called "fear gauge" or "fear index" | |
| - Based on S&P 500 options prices (30-day forward looking) | |
| - Normal: 12-20, Elevated: 20-30, High: 30+, Extreme: 40+ | |
| - Typically spikes during market crashes and uncertainly | |
| - 2020 COVID: VIX hit 80+, 2008 crisis: 80+ | |
| - Inverse correlation with stocks (VIX up = stocks down usually) | |
| """, | |
| """ | |
| **Treasury Yield Curve** plots yields of US Treasury bonds across maturities. | |
| - Normal curve: Long-term yields higher than short-term (upward sloping) | |
| - Inverted curve: Short-term yields exceed long-term (downward sloping) | |
| - Inverted curve predicts recession within 6-24 months (historically accurate) | |
| - 2s/10s spread most watched (2-year vs 10-year Treasury) | |
| - Reflects investor expectations for interest rates and economy | |
| - Fed controls short end, market controls long end | |
| """, | |
| ] | |
| # Financial Planning | |
| financial_planning = [ | |
| """ | |
| **FIRE (Financial Independence, Retire Early)** is movement to achieve financial independence through aggressive saving. | |
| - Save 50-70% of income, invest in low-cost index funds | |
| - Target: 25x annual expenses invested (4% rule) | |
| - Example: Need $40k/year β Save $1M β Retire early | |
| - Variations: Lean FIRE (<$40k/year), Fat FIRE ($100k+/year), Barista FIRE (part-time work) | |
| - Requires high income, low expenses, aggressive investing | |
| - Typical timeline: 10-20 years depending on savings rate | |
| """, | |
| """ | |
| **Net Worth** is total assets minus total liabilities. | |
| - Assets: Cash, investments, home equity, retirement accounts | |
| - Liabilities: Mortgage, student loans, credit cards, car loans | |
| - Formula: Net Worth = Assets - Liabilities | |
| - Track quarterly or annually to measure financial progress | |
| - Average US net worth: $192k (median: $121k) | |
| - Focus on increasing assets and decreasing liabilities over time | |
| """, | |
| """ | |
| **Debt Avalanche** is debt repayment strategy targeting highest interest rate first. | |
| - Pay minimums on all debts, extra to highest interest rate debt | |
| - Mathematically optimal - saves most on interest | |
| - Example: Pay off 20% credit card before 6% car loan before 4% student loan | |
| - Slower psychological wins than debt snowball method | |
| - Best for financially disciplined individuals | |
| - Can save thousands in interest over time | |
| """, | |
| """ | |
| **Debt Snowball** is debt repayment strategy targeting smallest balance first. | |
| - Pay minimums on all debts, extra to smallest balance | |
| - Quick psychological wins motivate continued progress | |
| - Example: Pay off $500 credit card before $5,000 car loan before $30,000 student loan | |
| - May cost more in interest than avalanche method | |
| - Popularized by Dave Ramsey | |
| - Better for those needing motivation and quick wins | |
| """, | |
| """ | |
| **Credit Score** is numerical representation of creditworthiness (300-850). | |
| - Factors: Payment history (35%), amounts owed (30%), length of history (15%), new credit (10%), types (10%) | |
| - Excellent: 750+, Good: 700-749, Fair: 650-699, Poor: <650 | |
| - Affects: Loan approval, interest rates, insurance premiums, apartment rentals | |
| - Improve by: Pay on time, keep utilization <30%, don't close old cards, limit new applications | |
| - Check free annually: AnnualCreditReport.com (official site) | |
| - Takes time to build - length of history matters | |
| """, | |
| ] | |
| # Combine all content | |
| all_documents = ( | |
| financial_concepts + | |
| investment_strategies + | |
| tax_concepts + | |
| market_indicators + | |
| financial_planning | |
| ) | |
| # Create Document objects | |
| documents = [ | |
| Document(page_content=content.strip(), metadata={"source": "finance_knowledge"}) | |
| for content in all_documents | |
| ] | |
| print(f"π Creating knowledge base with {len(documents)} documents...") | |
| # Create FAISS vector store | |
| db = FAISS.from_documents(documents, embeddings) | |
| # Save to disk | |
| output_path = "./knowledge_base/faiss_index" | |
| os.makedirs(output_path, exist_ok=True) | |
| db.save_local(output_path) | |
| print(f"β Knowledge base created successfully!") | |
| print(f"π Saved to: {output_path}") | |
| print(f"π Total documents: {len(documents)}") | |
| print(f"πΎ Vector database ready for use!") | |