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Saving and Invs. Voc
| Term | Definition |
|---|---|
| savings | the excess of income over consumption expenditures |
| investment | the outlay of money usually for income or profit |
| return on investment | A measure of how much you gained or lost from an investment relative to the initial amount you put in |
| compound interest | interest computed on the sum of an original principal and accrued interest |
| stock | the ownership element in a corporation usually divided into shares and represented by transferable certificates |
| bond | an insurance agreement pledging that one will become legally liable for financial loss caused to another by the act or default of a third person or by some contingency over which the third person may have no control |
| diversification | the act or process of diversifying something or of becoming diversified : an increase in the variety or diversity of something |
| 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 | something given in addition to what is ordinarily expected or owed |
| mutual fund | A mutual fund is a way for many investors to pool their money to buy a large portfolio of stocks, bonds, or other securities |
| common stock | a class of stock that represents equity ownership in a corporation |
| preferred stock | a component of share capital that may have any combination of features not possessed by common stock |
| corporate bond | a debt security issued by a corporation to raise capital |
| government bond | a debt security where an investor loans money to a government in return for an agreed rate of interest |
| beneficiary | someone who inherits something when someone dies |
| executor | someone who is named to act on behalf of another |
| trust | to give a task, duty, or responsibility to |
| estate | the total property owned by a person, including real estate, personal belongings, and financial assets, especially after their death |
| will | A legal document, or last will and testament, that details your wishes for your assets after you die |
| power of attorney | a legal document that grants a trusted person, called an agent, the authority to make decisions on your behalf in financial, legal, or healthcare matters |
| investment liquidity | the ability to convert an asset into cash quickly without losing significant value |
| probate | court-supervised legal process for managing the assets and debts of a deceased person, known as the decedent |
| personal financial planning | the process of managing your money to achieve your personal financial goals |
| estate planning | the process of arranging the transfer and management of your assets and personal affairs in anticipation of your incapacitation or death |
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