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Savings vocab
| Term | Definition |
|---|---|
| savings | Extra money that you have leftover put up for future use. |
| investment | Income that is used to invest in a future product/deal. |
| return on investment | Shows how much profit or loss an investment has made compared to its costs. |
| compound interest | Interest that is added onto a sum of the original price. |
| stock | Ownership that sells in shares to produce more profit for a company. |
| bond | Agreement when a business borrows money from investors and pays it back with interest. |
| diversification | Spreading investments between multiple securities. |
| retirement account | A savings plan to help save money for people when they are done working in the future. |
| stock market | A market that is designed for specific stocks. |
| dividend | A share of profit to stock holders. |
| mutual fund | Investment company that invests with money from their shareholders usually in a group. |
| common stock | Stocks other than the preferred stock. |
| preferred stock | Stock that has priority over common stock. |
| corporate bond | A loan given to a company that promises to pay you back the amount on a specific date. |
| government bond | A loan made to the government that promises to pay you back the original amount and also interest on a set date. |
| beneficiary | Person that is named to be given the principal or income from a trust. |
| executor | Person named in the will to manage the funds of the person who passed. |
| trust | Legal agreement where a trustee manages a business money and funds for the benefit of the beneficiaries. |
| estate | Assets and liabilities left by a person when dead. |
| will | A legal document of a person's request of their property and funds after death. |
| power of attorney | Legal instrument that authorizes someone to act as the attorney of a grantor. |
| investment liquidity | How quickly an investment can be converted to cash without a loss in value. |
| personal financial planning | process of managing your money to achieve your short term and long term goal. |
| estate planning | Arranging for the disposition of someone's property at death through a will. |