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saving and investing
| Term | Definition |
|---|---|
| savings | the excess of income over consumption expenditures |
| investment | the outlay of money usually for income or profit |
| return on investment | The amount of profit you make from an investment. |
| 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 | bond is a debt security issued by a government or corporation to raise capital. |
| diversification | the act or practice of spreading investments among a variety of securities or classes of securities |
| retirement account | A retirement account is a savings plan with tax advantages designed to help individuals save money for when they stop working |
| stock market | the market for stocks throughout a country |
| dividend | a share of surplus allocated to a policyholder in a participating insurance policy |
| 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 issued by a corporation to borrow money from investors. |
| government bond | a type of debt security where an investor loans money to a government in return for regular interest payments and the return of their initial investment |
| beneficiary | a person or entity named to receive the principal or income or both from a trust |
| executor | the person appointed by a testator to execute a will |
| trust | a combination of firms or corporations formed by a legal agreement |
| estate | the assets and liabilities left by a person at death |
| will | a legal document that specifies how a person's assets and obligations should be handled 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 investment can be bought or sold and converted to cash |
| probate | a court with jurisdiction over determination of the validity of wills and administration of estates |
| personal financial planning | the comprehensive, ongoing process of managing your money to achieve your life goals and financial security. |
| 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 |
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