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Savings & Inesting
| Term | Definition |
|---|---|
| savings | putting aside money for future use |
| investment | The outlay of money usually for income or profit |
| return on investment | The profitability of an investment. |
| compound interest | interest computed on the sum of an original principal and accrued interest |
| stock | a store or supply accumulated or available |
| bond | a binding agreement |
| diversification | the act or practice of spreading investments among a variety of securities or classes of securities |
| retirement account | Tax-advantaged investment account for saving for retirement stock market : a market for particular stocks |
| dividend | A company’s profits paid to its shareholders |
| mutual fund | an open-end investment company that invests money of its shareholders in a usually diversified group of securities of other corporations |
| common stock | stock other than preferred stock |
| preferred stock | stock guaranteed priority by a corporation’s charter over common stock in the payment of dividends and usually in the distribution of assets |
| corporate bond | debt security issued by a corporation to raise capital for things like expansion or acquisitions |
| government bond | debt security issued by a government to raise money for public spending and projects |
| beneficiary | person or entity that receives a benefit from contract, trust, or other agreement |
| executor | person or entity named in a will to manage the deceased’s estate, which include their business interests |
| trust | legal arrangement where a trustee manages assets for beneficiaries, or a combination of companies organized to reduce competition |
| estate | involves activities like buying, selling, leasing, and managing properties for profit |
| will | legal document that outlines an owner’s specific wishes for their company after their death or incapacitation |
| power of attorney | a legal instrument authorizing one to act as the attorney or agent of the grantor |
| investment liquidity | asset can be converted into cash without a significant loss in its value |
| probate | legal process of validating a business owner’s will and overseeing the transfer of the business assets to beneficiaries |
| personal financial planning | the comprehensive and ongoing process by which business owners manage their individual finances |
| estate planning | the arranging for the disposition and management of one’s estate at death through the use of wills, trusts, insurance policies, and other devices |