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Savings and invest
| Term | Definition |
|---|---|
| savings | The excess of income over consumption expenditures |
| investment | The outlay of money usually for income or profit: capital outlay |
| return on investment | An ROI is a performance metric that evaluates the efficiency of an investment by comparing gain to its cost. |
| compound interest | Interest computed on the sum of an original principal and accrued interest |
| stock | The ownership in a corporation usually divided into shares and represented by transferable certificates |
| bond | An interest-bearing certificate of public or private indebtedness |
| diversification | The act of spreading investments among a variety of securities or classes of securities |
| retirement account | A retirement savings account in which income taxes on certain deposits and on all gains are deferred until withdrawals are made |
| stock market | The market of stocks throughout a country |
| dividend | A share in a pro rata distribution(as of profits) to stockholders |
| 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 | A debt security that is issued by a company to raise capital |
| government bond | A debt security issued by a government to support government spending and obligations |
| beneficiary | A person or entity(as charity or estate) designated usually in a legal instrument to receive money or property |
| executor | A person appointed by a testator to execute a will |
| trust | a property interest held by one person for the benefit of another |
| estate | The assets and liabilities left by a person at death |
| will | A legal declaration of a person’s wishes regarding the disposal of their property or estate after death |
| power of attorney | A legal instrument authorizing one to act as the attorney or agent of the grantor |
| investment liquidity | The ease and speed with which an asset can be converted into cash without a significant loss in value |
| probate | The action or process of proving before a competent judicial authority that a document offered for official recognition and registration as the last will and testament of a deceased person is genuine |
| personal financial planning | Personal financial planning is the process of managing your money to achieve your financial goals by evaluating your current financial status and creating a strategy for income, expenses, savings, and investments. |
| estate planning | Estate planning is the legal and financial process of arranging for the management and distribution of a person's assets after their death or incapacitation. |
Created by:
s.emory.baker