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Savings & Investing
Vocab
| Term | Definition |
|---|---|
| Savings | the money one has saved, especially through a bank or investment plan |
| Investment | the action or process of investing money for profit or material result |
| Return on Investment | a performance metric that evaluates the profitability of an investment by comparing the net profit to the cost of the investment |
| Compound Interest | the process of earning interest on both the initial principal and the accumulated interest from previous periods |
| Stock | the capital raised by a business or corporation through the issue and subscription of shares. |
| Bond | a certificate issued by a government or a public company promising to repay borrowed money at a fixed rate of interest at a specified time |
| Diversification | the action of diversifying something or the fact of becoming more diverse |
| Retirement Account | a savings and investment account designed to hold money for future use in retirement |
| Stock Market | a collection of exchanges where investors buy and sell shares of public companies |
| Dividend | a sum of money paid regularly by a company to its shareholders out of its profits |
| Mutual Fund | a professionally managed investment that pools money from many investors to purchase a diversified portfolio of securities, such as stocks, bonds, and money market instruments |
| Common Stock | represents equity ownership in a company, giving shareholders the right to vote on corporate decisions and a claim on residual profits through dividends |
| Prefered Stock | a hybrid security that blends features of both stocks and bonds, offering a fixed dividend and priority over common stock for dividends and assets |
| Corporate Bond | a debt instrument issued by a company to raise capital, and it functions like a loan from an investor to the corporation. In exchange for cash, the company promises to make periodic interest payments and repay the principal amount when the bond matures |
| Government Bond | a debt-based investment where an individual loans money to a government for a set period in exchange for regular interest payments |
| Beneficiary | a person who derives advantage from something, especially a trust, will, or life insurance policy |
| Executor | a person or institution appointed by a testator to carry out the terms of their will |
| Trust | an arrangement whereby a person holds property as its nominal owner for the good of one or more beneficiaries |
| Estate | all the money and property owned by a particular person, especially 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 | 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 | the legal and financial process of arranging for the management and distribution of a person's assets after their death or incapacitation |
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