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harvilinvesting
| Term | Definition |
|---|---|
| saving | putting money aside gradually, typically into a bank account |
| investment | traditionally defined as the "commitment of resources to achieve later benefits" |
| return on investment | a way to assess a company's efficiency at allocating the capital under its control to profitable investments |
| compound interest | when you earn interest on the money you've saved and on the interest you earn along the way |
| stock | a share in the ownership of a company, including a claim on the company's earnings and assets |
| bond | a type of security under which the issuer owes the holder a debt, and is obliged – depending on the terms – to provide cash flow to the creditor |
| diversification | the process of allocating capital in a way that reduces the exposure to any one particular asset or risk |
| retirement account | a tax-advantaged investment account designed to help you save toward retirement |
| stock market | a stock exchange |
| dividend | a reward, cash or otherwise, that a company gives to its shareholders |
| mutual fund | a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt |
| common stock | a tradeable asset or security that represents your ownership of a corporation's equity that's normally attained by purchasing the company's shares |
| preferred stock | shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued |
| corporate bond | Debt instrument issued by a company, distinct from one issued by a government or government agency |
| government bond | a loan that the bond purchaser, or bondholder, makes to the bond issuer |
| beneficiary | the person or entity that you legally designate to receive the benefits from your financial products |
| executor | someone named in a will as the person who will carry out the testator's formal wishes |
| trust | a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries |
| estate | everything of value that an individual owns |
| will | a legal document that coordinates the distribution of your assets after death and can appoint guardians for minor children |
| power of attorney | a legal document that grants a trusted agent the authority to act on behalf of the principal-agent in financial matters |
| investment liquidity | refers to how quickly an investment can be sold without negatively impacting its price |
| probate | formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries |
| personal financial planning | financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events |
| estate planning | process of anticipating and arranging for the management and disposal of a person's estate during the person's |
Created by:
gabrielle.harvil
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