Personal Finance
Defined as your ability to live well based on the income you earn - think nice house, fancy cars
What is "rich"?
The name for this type of asset is another word for stock. It's when you own a piece of a company
What is Equity?
A term that describes a loan, backed by a contract, that is also a tradeable security
What is a bond?
This is a store of value, a unit of account, and a medium of exchange
This is the term for debt on a property that significantly decreases your return in bad scenarios
What is leverage?
This is defined as your ability to live well based on the assets you own - think living off of assets in retirement
What is "wealthy"?
On the income statement, what is the last profit related line on the income statement
What is net profit/net income?
This is another term for high yield bonds, or bonds rated below BBB
What is a junk bond?
For centuries, this precious metal was used as money
What is gold?
This is the public market vehicle where individual investors can gain exposure to real estate assets and investing
What is a REIT or Real Estate Investment Trust?
This pathway to wealth is based on a unique ability or skill you have that can be monetized, like being an elite athlete or highly skilled in computer programing
What is a talent?
Stocks of this type of similar characteristics of high future expected earnings growth and are typically more volatile, or risky, than their value stock counterparts
What is a growth stock?
This is another name for bonds and is due to the contract terms and amounts being clearly defined and fixed.
What is fixed income securities?
The name given to the severe worldwide economic meltdown that happened in 2007-2008.
What is the GFC (Great Financial Crisis)
This is the main financial focus for commercial real estate investing
What is cash flow?
A lifestyle quality where you spend less than you make and the difference is added to your savings and invested
What is living below your means?
On the balance sheet, this is the difference between total assets and total liabilities
What is shareholder equity/total equity?
Stock investors are more focused on the profits a company makes, but bond investors are more focused on this aspect of a company's financial health
What is a company's ability to make its interest payment?
This is another word for risk, and is usually measured by standard deviation
What is volatility?
The person a real estate investor hires to handle emergencies and potentially collect rent
What is the property manager?
This should be your first pool of savings and your first line of defense when money is needed for an emergency
What is an emergency fund?
This is a reason for buying a specific stock, your belief is different from the markets' belief about future profits
What is undervalued future profits?
This type of government bond is essentially a loan to the US Government and serves as a benchmark interest rate for various markets and aspects of the economy, they can even influence the rates on real estate loans
This kind of business usually has little to no employees and
What is a small business?
This is another way to determine the value of a property, other than cash flows
What is comparable sales?