Investing
A group of financial instruments which have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash)
What is an asset class
A document with information about a person's credit activity and history
What is a credit report
When your expenses exceed your income
What is a deficit
A type of savings account, typically offering higher interest rates, that is managed entirely online with no physical bank branch
What is an online or high yield savings account
A condition where there are unlimited wants and needs versus limited resources
What is scarcity
A market in which prices are falling, encouraging selling
What is a bear market
An attempted recovery of a past-due credit obligation or debt by a collection department or agency
What is collections
Items or services you pay for such as rent, groceries, entertainment, bills, etc.
What are expenses
Reinvesting earned interest back into the principal to allow money to grow exponentially over time
What is compound interest
The highest-valued alternative that must be forgone when a choice is made
What is an opportunity cost
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
What is a bond
A legal proceeding carried out to allow individuals or businesses freedom from their debts, while simultaneously providing creditors an opportunity for repayment
What is bankruptcy
Money that is received from work, investments, business, etc.
What is income
A bank product that earns interest on a lump-sum deposit that's untouched for a predetermined period of time
What is a certificate of deposit (CD)
A general increase in the price level of goods and services in an economy
What is inflation
The practice of investing in a large variety of stocks, bonds, and/or funds as a way to as a way to reduce your overall risk
What is diversification
Long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score
What is default
When your income exceeds your expenses and you have money leftover
What is a surplus
The government agency that insures customer deposits if a bank fails up to $250,000 per individual depositor
What is the Federal Deposit Insurance Corporation (FDIC)
An economic system in which the means of production are privately owned and operated for profit
What is capitalism
Money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis
What is a dividend
A three-digit number (ranging from 300-850) based on an individual's credit history detailed in a credit report
What is a credit score
A measurement of your assets (money you've saved or things of value you own) minus your liabilities (money you owe others); also called net worth
What is wealth
A method of saving whereby you put a fixed amount of income into a savings account before you pay monthly bills or make purchases
What is pay yourself first
The quantity of a good that consumers are willing and able to purchase at various prices during a given time
What is demand