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Financial lit Vocab
| Term | Definition |
|---|---|
| Values | a person's principles or standards of behavior; one's judgment of what is important in life. |
| Needs | of necessity. |
| Wants | have a desire to possess or do (something); wish for. |
| Scarcity | the state of being scarce or in short supply; shortage. |
| Goals | the object of a person's ambition or effort; an aim or desired result. |
| Over confindence | the quality of being too confident; excessive confidence. |
| Fear of missing out | anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media. |
| Regret avoidance | he tendency for people to make emotional, rather than logical decisions in order to avoid feeling regret. |
| Confirmation Bias | the tendency to process information by looking for, or interpreting, information that is consistent with one's existing beliefs. |
| Regret Aversion | when a decision is made to avoid regretting an alternative decision in the future. |
| Endowment effect | a circumstance in which an individual places a higher value on an object that they already own than the value they would place on that same object if they did not own it |
| Loss Aversion | an individual's tendency to prefer avoiding losses to acquiring equivalent gains. |
| Sunk costs | an investment already incurred that can't be recovered |
| Hedonic adaptation | One day, you realize it no longer brings you any additional enjoyment at all and you feel like you did before you even purchased the bike |
| Bandwagon effect | a psychological phenomenon whereby people do something mostly because others are doing it, often ignoring their personal principles or underlying evidence. |
| Economy | the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services. |
| Resources | a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively. |
| Eutreprenurship | the activity of setting up a business or businesses, taking on financial risks in the hope of profit. |
| Land | the part of the earth's surface that is not covered by water, as opposed to the sea or the air. |
| Labor | work, especially hard physical work. |
| Capital | wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing |
| Market economy | an economic system in which production and prices are determined by unrestricted competition between privately owned businesses |
| Command economy | an economy in which production, investment, prices, and incomes are determined centrally by a government. |
| Traditional economy | a system in which the development and distribution of goods and services are determined by customs, traditions, and time-honored beliefs. |
| Mixed economy | an economic system combining private and public enterprise. |
| Capitalism | an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. |
| Socialism | a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. |
| Communism | a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs. |
| Ultimate dream goal | he final result or aim of a long series of events. |
| Mission | an important assignment carried out for political, religious, or commercial purposes, typically involving travel. |
| Vision | the ability to think about or plan the future with imagination or wisdom. |
| Short-term goal | something you want to do in the near future. |
| Mid-term goal | objectives that may take longer to achieve than short-term objectives, but they often have a shorter timeline than that of a long-term goal. |
| Long-term goal | something you want to accomplish in the future. |
| SMART goals | Goals that are Specific, Measurable, Achievable, Realistic, and Timely. |
| Financial planning pyramid | a road map to help people decide where to put their emphasis today in preparing to reach their ultimate financial goals. |
| Cash flow | the total amount of money being transferred into and out of a business, especially as affecting liquidity |
| Risk profiling | a quantitative analysis of the types of threats an organization, asset, project or individual faces. |
| Emergency fund | a cash reserve that's specifically set aside for unplanned expenses or financial emergencies |
| Estate | an extensive area of land in the country, usually with a large house, owned by one person, family, or organization |
| Portfolio | relating to, denoting, or engaged in an employment pattern that involves a succession of short-term contracts and part-time work, rather than the more traditional model of a long-term single job. |
| Insurance | a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. |
| Tax planning | reduction of tax liability by the way of exemptions, deductions and benefits. |
Created by:
graydaw001
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