Investment
Buying and selling investments - typically individual stocks and funds - within a short time frame (from seconds/minutes to days/weeks) in hopes of making quick profits from the small price changes. Research shows that 95% of active traders lose money.
Active Trading
A person who compiles and analyzes statistics to calculate risk and determine insurance rates and premiums
Actuary
A mortgage in which the initial interest rate is normally fixed for a specified period of time after which it is reset periodically, often every month
Adjustable-Rate Mortgage (ARM)
The standard Internal Revenue Service (IRS) form that individuals can use to file their annual income tax returns
1040
A popular savings rule of thumb in which 50% of your income goes towards necessities, 20% goes towards saving and debt repayment, and 30% goes towards flexible spending
50-20-30 Rule
Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash
Asset Allocation
Health insurance that provides protection against the high cost of treating severe or lengthy illness or disabilities and usually has a high deductible and lower premiums
Catastrophic Health Insurance
A type of loan where you borrow money from your retirement savings account. You must pay that borrowed money back, plus interest, within 5 years of taking your loan, in most cases.
401(k) Loan
A form that details all "non-employee" compensation, including for specific jobs like freelancers or contractors
1099
Automatic Teller Machine. Allows a person to manage a bank account holder's funds through actions such as withdrawing or depositing money, viewing account balances, etc.
ATM
A group of financial instruments which have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash)
Asset Class
Children's Health Insurance Program. A program that provides low-cost health coverage to children in families who earn too much money to qualify for Medicaid
CHIP
The paying off of debt over time in equal installments; part of each payment goes toward the loan principal while the other part goes toward interest
Amortization
An inspection of a filer's tax return by the IRS
Audit
The amount of money you have in your bank account
Balance
A market in which prices are falling, encouraging selling.
Bear Market
A formal request from the customer to an insurance company asking for a payment based on the terms of the insurance policy
Claim
A yearly fee that may be charged for having a specific credit card, independent of how you use the card
Annual Fee
Profit from the sale of an asset, such as a stock or a bond, calculated by subtracting the price you initially paid from the price you then sold it for
Capital Gain
A monthly document prepared by your financial institution which shows all of the transactions related to your account
Bank Statement
A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date
Bond
A percentage you pay each time you receive medical treatment, after you’ve paid your deductible
Coinsurance
The cost you pay each year to borrow money, including fees, expressed as a percentage
Annual Percentage Rate (APR)
A percentage of profits paid by a business to the federal and state government
Corporate Income Tax
A bank product that earns interest on a lump-sum deposit that's untouched for a predetermined period of time
Certificate Of Deposit (CD)