Vocabulary
A savings account you can access quickly to pay for unexpected expenses or emergencies (least 6 months of expenses)
What is Emergency fund?
A share of ownership in a company
What is stock
an investment in which investors pool their money to buy stocks, bonds, and other securities selected by professional managers who work for an investment company
What is a mutual fund
profit from the sale of assets such as stocks, bonds, or real estate
What is capital gain
when you trade spending now for the ability to spend in the future
What is time value of money
a high-risk investment that might earn a large profit in a short time (collectibles, futures)
What is speculative investment?
Ownership of residential or commercial property or land
What is Real Estate
a specialist who is trained to offer specific financial help and advice
What is financial planner
the sale of an investment for less than its purchase price
What is capital loss
a financial institution that serves individuals and businesses with a wide variety of services
What is a bank
distributions of money, stock, or other property that a corporation may pay to stockholders
What are dividends
a type of stock that gives the owner the advantage of receiving cash dividends before common stockholders receive cash dividends
What is preferred stock
the process of spreading your assets among several different types of investments to reduce risk
What is diversification
The market condition when investors are pessimistic about the economy and sell stock.
What is a Bear Market
This decreases risk by investing money in a variety of investment tools.
What is a mutual fund
the total return on an investment expressed as a percentage of the amount of money earned on an investment
What is rate of return
a corporation's written pledge to repay a specific amount of money, along with interest
What is corporate bond
Investments are important to building this
What is net worth
a deposit for which the interest rate changes over time
What is a money market account
one in which you can deposit money, earn interest on your deposits, and withdraw your money at any time
What is a saving account
this has a market value that reflects the current economy. If the economy is high this is also high
What is Cyclical stock
the written pledge of the government or a municipality, such as a city, to repay a specific sum of money with interest
What is government bond
The danger that money won't be worth as much in the future as it is today.
What is inflation
a written promise to pay a debt by a specified date
What is a bond
a deposit in a savings institution that earns a fixed interest rate for a specified period of time; you may not withdraw you money during the specified time period without paying a substantial penalty
What is a certificate of deposit (CD)