Banking Vocabulary
ABA number/ routing number
location of your bank
APY
Annual Percentage Yield...the rate of yearly earnings from an account
ATM machine
no cost usually at your bank, high fees at other places
bank fees
some banks will charge per check, per account, per transaction
bank statement
once a month list of a person's bank transactions
blank endorsement
anybody can cash
cash card
a specific amount of money on a credit card or gift card
certificate of deposit (CD)
bank account, locked in rate, locked in time, penalties and fees for early withdrawal, better interest rates than other accounts
Check Cashing Store
a non-bank institution that provides check-cashing services for consumers who don't have a bank account; fees are usually relatively high
checking account
Most liquid, zero or very low interest rate, easy access to money
commercial banks
for profit
compound interest
interest earning interest
credit card
allows the consumer to buy now and pay later
credit union
tax exempt, members only banking
debit card
takes money directly out of your checking account
Deposit made of $10,000 or more
The Treasury Department needs to be notified
deposit slip
come with your checks, banks have them in their lobby, use for making a deposit
direct deposit
pay check automatically place into your account
EFT
Electronic Funds Transfer...bill pay
emergency savings
at least 3 - 6 months worth of your present pay
Health Savings Account (HSA)
An account in which you can save pre-tax dollars to pay for out-of-pocket health care expenses
insufficient funds
not having enough money in your account
IRA accounts
Individual retirement account
joint account
when more than one person has access to that account
liquid account
something that can be turned into cash quickly
money market account
An account similar to a traditional savings account but that typically pays higher interest, requires a higher minimum balance, and may allow check writing
online bill pay
your bank will pay your bills for you at a specified time and amount
outstanding check
a check that hasn't cleared the bank
overdraft protection
coverage in case you bounce a check
Person-to-Person Payment
An online process that allows you to send money directly from your checking account to a friend via email or cell phone.
PIN
personal identification number
principal
the beginning amount or original amount
reconcile
balancing your check book with the bank numbers
restrictive endorsement
"for deposit only"
Roth IRA
pay taxes on deposit, no taxes on withdrawal at retirement
Rule 72
A means for calculating how long it will take to double an investment...if the interest rate is 3%, divide that into 72
(72/3 =24years)
safety deposit box
rent from the bank to keep important items safe
savings account
bank account, low interest, somewhat easy to access your money
signature card
a way a bank knows you signed the check
simple interest
interest on only the original amount deposited
special endorsement
two party check, endorsed with "pay to the order of"
stop payment
if a person wants to not pay a check which has already been written
tax deferred
not paying taxes now but later
tax exempt
not having to pay tax
Traditional IRA
tax deferred
travelers checks
purchased from a bank, good as cash, best way to carry money when traveling, write down numbers so they can be replaced
void check/Cancelled Check
a check that was written but was then destroyed
location of your bank
APY
Annual Percentage Yield...the rate of yearly earnings from an account
ATM machine
no cost usually at your bank, high fees at other places
bank fees
some banks will charge per check, per account, per transaction
bank statement
once a month list of a person's bank transactions
blank endorsement
anybody can cash
cash card
a specific amount of money on a credit card or gift card
certificate of deposit (CD)
bank account, locked in rate, locked in time, penalties and fees for early withdrawal, better interest rates than other accounts
Check Cashing Store
a non-bank institution that provides check-cashing services for consumers who don't have a bank account; fees are usually relatively high
checking account
Most liquid, zero or very low interest rate, easy access to money
commercial banks
for profit
compound interest
interest earning interest
credit card
allows the consumer to buy now and pay later
credit union
tax exempt, members only banking
debit card
takes money directly out of your checking account
Deposit made of $10,000 or more
The Treasury Department needs to be notified
deposit slip
come with your checks, banks have them in their lobby, use for making a deposit
direct deposit
pay check automatically place into your account
EFT
Electronic Funds Transfer...bill pay
emergency savings
at least 3 - 6 months worth of your present pay
Health Savings Account (HSA)
An account in which you can save pre-tax dollars to pay for out-of-pocket health care expenses
insufficient funds
not having enough money in your account
IRA accounts
Individual retirement account
joint account
when more than one person has access to that account
liquid account
something that can be turned into cash quickly
money market account
An account similar to a traditional savings account but that typically pays higher interest, requires a higher minimum balance, and may allow check writing
online bill pay
your bank will pay your bills for you at a specified time and amount
outstanding check
a check that hasn't cleared the bank
overdraft protection
coverage in case you bounce a check
Person-to-Person Payment
An online process that allows you to send money directly from your checking account to a friend via email or cell phone.
PIN
personal identification number
principal
the beginning amount or original amount
reconcile
balancing your check book with the bank numbers
restrictive endorsement
"for deposit only"
Roth IRA
pay taxes on deposit, no taxes on withdrawal at retirement
Rule 72
A means for calculating how long it will take to double an investment...if the interest rate is 3%, divide that into 72
(72/3 =24years)
safety deposit box
rent from the bank to keep important items safe
savings account
bank account, low interest, somewhat easy to access your money
signature card
a way a bank knows you signed the check
simple interest
interest on only the original amount deposited
special endorsement
two party check, endorsed with "pay to the order of"
stop payment
if a person wants to not pay a check which has already been written
tax deferred
not paying taxes now but later
tax exempt
not having to pay tax
Traditional IRA
tax deferred
travelers checks
purchased from a bank, good as cash, best way to carry money when traveling, write down numbers so they can be replaced
void check/Cancelled Check
a check that was written but was then destroyed
Credit Vocabulary
3-Cs for credit rating
character, capacity, capital
amortization table
breakdown of payments of a loan over a period of time
Annual Fee
A yearly fee that's charged by the credit card company for the convenience of the credit card
annual percentage rate (APR)
the annual cost of credit a lender charges
Balance Transfer
Paying off one credit card balance by transferring it to another credit card.
balloon payment
making a large lump sum payment usually at the end of a loan
bankruptcy
not being able to repay debts on time and must have the courts excuse a them from repaying some or all debt, stays on credit report for 10 years
cash advances
getting cash using your credit card
Chapter 7 Bankruptcy
most debts are discharged (not student loans or child support), property is sold and proceeds distributed to creditors
Chapter 13 Bankruptcy
courts set up a payment program between 3 - 5 years
closed-end credit
a loan that must be repaid with finance charges by a certain date
collateral
property that a borrower promises to give up in case of default
consolidation loan
loan that combines all your debts into one loan with lower payments
contract
a legally binging agreement between the borrower and the creditor
cosigner
responsible person who signs the loan with you
credit
allows you to buy goods or services now and pay for them later
credit card
plastic most often used to buy goods and services on a time-payment plan
creditor
the person loaning money
credit report
a record of a person's credit history and financial behavior
credit score
850 is perfect, anything over 700 is good
creditworthy
applicant is judged to have the assets, income, and tendency to repay debt
debtor
person borrowing money
debt to credit ratio
the smaller this fraction, the better shape your credit is in
default
fails to pay the debt
easy-access credit
refers to short-term loans granted regardless of credit history at high interest rates
finance charges
the total dollar amount you pay to use credit
fix rate
APR stays the same throughout the payment period
foreclosure
the forced sale of property
garnishment
a legal procedure requiring a portion of the debtor's pay to be set aside by the person's employer to pay creditors
grace period
the time between the billing date and the start of interest charges
installment loans
borrow money and pay it back with interest in regular payments
Introductory APR
The typically low rate charged during the introductory period after a credit account is opened, after which the regular, typically higher, APR will apply
lien
a legal claim on a borrower's property by a creditor who is owed money
loan shark
refers to someone who loans money at excessive rates of interest
mortgage
a conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.
open-end credit
allows the borrower to use a certain amount of money for an indefinite period of time
pawnshop
a business that gives customers high-interest loans with personal property, such as jewelry, held as collateral
payday loans
short term, high interest loans that must usually be repaid on the borrower's next payday
principal
amount borrowed not including the interest
rent-to-own
a consumer pays rent for the use of a product and eventually owns it if they choose
repossession
taking back of collateral when a borrower fails to repay a loan
Revolving Credit
an account on which the account holder can charge repeatedly up to a maximum limit
Schumer Box
A table that appears in credit card agreements showing basic information about the card's rates and fees.
secured loan
requires collateral
subprime mortgage
lending to people with low or bad credit to buy a house
title loan
a short-term loan is made using a borrower's car as collateral
Truth in Lending Law
requires creditors to disclose how much the credit will cost
variable rate
APR fluctuates with the ups and downs of the economy
character, capacity, capital
amortization table
breakdown of payments of a loan over a period of time
Annual Fee
A yearly fee that's charged by the credit card company for the convenience of the credit card
annual percentage rate (APR)
the annual cost of credit a lender charges
Balance Transfer
Paying off one credit card balance by transferring it to another credit card.
balloon payment
making a large lump sum payment usually at the end of a loan
bankruptcy
not being able to repay debts on time and must have the courts excuse a them from repaying some or all debt, stays on credit report for 10 years
cash advances
getting cash using your credit card
Chapter 7 Bankruptcy
most debts are discharged (not student loans or child support), property is sold and proceeds distributed to creditors
Chapter 13 Bankruptcy
courts set up a payment program between 3 - 5 years
closed-end credit
a loan that must be repaid with finance charges by a certain date
collateral
property that a borrower promises to give up in case of default
consolidation loan
loan that combines all your debts into one loan with lower payments
contract
a legally binging agreement between the borrower and the creditor
cosigner
responsible person who signs the loan with you
credit
allows you to buy goods or services now and pay for them later
credit card
plastic most often used to buy goods and services on a time-payment plan
creditor
the person loaning money
credit report
a record of a person's credit history and financial behavior
credit score
850 is perfect, anything over 700 is good
creditworthy
applicant is judged to have the assets, income, and tendency to repay debt
debtor
person borrowing money
debt to credit ratio
the smaller this fraction, the better shape your credit is in
default
fails to pay the debt
easy-access credit
refers to short-term loans granted regardless of credit history at high interest rates
finance charges
the total dollar amount you pay to use credit
fix rate
APR stays the same throughout the payment period
foreclosure
the forced sale of property
garnishment
a legal procedure requiring a portion of the debtor's pay to be set aside by the person's employer to pay creditors
grace period
the time between the billing date and the start of interest charges
installment loans
borrow money and pay it back with interest in regular payments
Introductory APR
The typically low rate charged during the introductory period after a credit account is opened, after which the regular, typically higher, APR will apply
lien
a legal claim on a borrower's property by a creditor who is owed money
loan shark
refers to someone who loans money at excessive rates of interest
mortgage
a conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.
open-end credit
allows the borrower to use a certain amount of money for an indefinite period of time
pawnshop
a business that gives customers high-interest loans with personal property, such as jewelry, held as collateral
payday loans
short term, high interest loans that must usually be repaid on the borrower's next payday
principal
amount borrowed not including the interest
rent-to-own
a consumer pays rent for the use of a product and eventually owns it if they choose
repossession
taking back of collateral when a borrower fails to repay a loan
Revolving Credit
an account on which the account holder can charge repeatedly up to a maximum limit
Schumer Box
A table that appears in credit card agreements showing basic information about the card's rates and fees.
secured loan
requires collateral
subprime mortgage
lending to people with low or bad credit to buy a house
title loan
a short-term loan is made using a borrower's car as collateral
Truth in Lending Law
requires creditors to disclose how much the credit will cost
variable rate
APR fluctuates with the ups and downs of the economy
Vehicle Vocabulary
0% financing
no interest
4 cylinder
smaller engine with less power but usually better gas mileage
4x4 truck
the ability to have the engine drive all 4 wheels of a truck
auction
A public sale in which property or items of merchandise are sold to the highest bidder.
auto superstores
usually carries a huge inventory of vehicles
AWD (all wheel drive)
usually in reference to a carability to have 4 wheel drive, 4x4
cash back
getting a rebate on the purchase, buyer may use it for downpayment or any use
certified used car
A car that the dealer has inspected and repaired to meet manufacturer minimum
specifications for certification.
convertible
a vehicle with a retractable roof
dealership
a business established or operated under an authorization to sell or distribute a
company goods or services in a particular area
depreciation
Any decrease or loss in value caused by age, wear, or market conditions
down payment
money paid in cash to lower the cost of financing, sometimes required
EV
electric vehicle
front wheel drive
the torque of the engine is placed on the front wheels
GPS (global positioning system)
a system that determines accurately the precise position of something on earth using
satellites
hatchback
a sloping rear car door that is lifted to open
Kelley Blue Book value
different prices for what a vehicle is worth based on age, condition, style, color, options,
etc
lemon
slang, generally refers to a product that fails to meet even low expectations for quality
and performance.
mileage (mpg)
the ratio of the number of miles traveled to the number of gallons of gasoline burned
odometer
An instrument that measures distance traveled by a vehicle
options
all the possible features that are available with particular vehicles
pick-up
refers to a truck
private seller
an individual selling a vehicle
rear wheel drive
torque on rear axle, less traction
rebate
cash back from the dealer
recall
the manufacturer has found a problem with a vehicle
sedan
a closed automobile that has enough room for four people to sit comfortably
speedometer
a meter fixed to a vehicle that measures and displays its speed
standard options
comes with no additional cost
station wagon
a large car with extra space at the back, with a door there for loading and unloading
sticker price
Manufacturer suggested retail price (MSRP), the dealer initial asking price
SUV (sports utility vehicle)
A car designed to have multiple rows of seats and significant towing power. Most also
have the ability to drive off-road.
tachometer
measuring instrument for indicating speed of rotation of the engine
test drive
test of the roadworthiness of a vehicle one is considering buying
V-8
an engine with 8 cylinders placed in a way that forms more power, less gas
mileage
van
larger vehicle made for transporting groups of people
VIN number
identifies the car/truck; unique for each car/truck
warranty
a written guarantee from the manufacturer or distributor that states the conditions under
which the product can be returned, replaced, or repaired.
no interest
4 cylinder
smaller engine with less power but usually better gas mileage
4x4 truck
the ability to have the engine drive all 4 wheels of a truck
auction
A public sale in which property or items of merchandise are sold to the highest bidder.
auto superstores
usually carries a huge inventory of vehicles
AWD (all wheel drive)
usually in reference to a carability to have 4 wheel drive, 4x4
cash back
getting a rebate on the purchase, buyer may use it for downpayment or any use
certified used car
A car that the dealer has inspected and repaired to meet manufacturer minimum
specifications for certification.
convertible
a vehicle with a retractable roof
dealership
a business established or operated under an authorization to sell or distribute a
company goods or services in a particular area
depreciation
Any decrease or loss in value caused by age, wear, or market conditions
down payment
money paid in cash to lower the cost of financing, sometimes required
EV
electric vehicle
front wheel drive
the torque of the engine is placed on the front wheels
GPS (global positioning system)
a system that determines accurately the precise position of something on earth using
satellites
hatchback
a sloping rear car door that is lifted to open
Kelley Blue Book value
different prices for what a vehicle is worth based on age, condition, style, color, options,
etc
lemon
slang, generally refers to a product that fails to meet even low expectations for quality
and performance.
mileage (mpg)
the ratio of the number of miles traveled to the number of gallons of gasoline burned
odometer
An instrument that measures distance traveled by a vehicle
options
all the possible features that are available with particular vehicles
pick-up
refers to a truck
private seller
an individual selling a vehicle
rear wheel drive
torque on rear axle, less traction
rebate
cash back from the dealer
recall
the manufacturer has found a problem with a vehicle
sedan
a closed automobile that has enough room for four people to sit comfortably
speedometer
a meter fixed to a vehicle that measures and displays its speed
standard options
comes with no additional cost
station wagon
a large car with extra space at the back, with a door there for loading and unloading
sticker price
Manufacturer suggested retail price (MSRP), the dealer initial asking price
SUV (sports utility vehicle)
A car designed to have multiple rows of seats and significant towing power. Most also
have the ability to drive off-road.
tachometer
measuring instrument for indicating speed of rotation of the engine
test drive
test of the roadworthiness of a vehicle one is considering buying
V-8
an engine with 8 cylinders placed in a way that forms more power, less gas
mileage
van
larger vehicle made for transporting groups of people
VIN number
identifies the car/truck; unique for each car/truck
warranty
a written guarantee from the manufacturer or distributor that states the conditions under
which the product can be returned, replaced, or repaired.
Housing
adjustable rate mortage
interest rate changes in response to the movement of interest rates in the economy as a
whole
amortization
A method for computing equal periodic payments for an installment loan.
appraisal
An estimate of the current value of the property.
closing cost (points)
The expenses incurred (loan company fees, lawyer's fee, title transfer fee to the county,
etc) at the time of settlement when transferring property.
condominium
A multi-unit structure where a resident owns the unit together with an interest in the
common areas
contingency clause
a clause in a real estate sales contract that makes the agreement conditional on such
factors as the availability of financing, properly inspections, or obtaining expert advice
contractor
Independent business hired to provide production services
custom-built homes
usually designed by an architect to meet particular needs and wants of the builder
deed
A document that transfers ownership of property from one party to another.
down payment
A portion of the total cost of an item that must be paid at the time of purchase.
escrow account
An account where money is held in trust until it can be delivered to a designated party
fixed rate mortage
A loan in which the interest rate and payments remain the same
floor plan
a diagram of a home or other structure that shows the arrangement of rooms
frame house
a house made mostly of wood
home equity loan
Credit line offered by mortgage lenders that allows a homeowner to borrow money
against the equity in their home.
house
family dwelling that stands alone
inspection
checking out something before buying...looking for specific findings—expected or
unexpected
lease
a contract granting use or occupation of property during a specified time for a specified
payment
lowering home insurance
security system, smoke detectors, brick vs wood frame, raise your deductible, bundle
with car insurance, good credit
modular home
a home made up of separate boxlike sections that are built in a factory and assembled
at the site
mortgage
a loan to finance the purchase of real estate with specified payment periods and interest
rates
offer
A proposal by one party to another intended to create a legally binding agreement.
Terms must be clear, definite and certain
points
charged by the lender to obtain a loan, usually about 1% of the money borrowed
principal
the original amount of the loan, cost of the item
property insurance
A type of insurance that covers damage to property, such as a home, must have before
getting a loan
real estate broker
An agent authorized under state licensing laws to operate independently in the business
of buying and selling property
recording fees
Charges for recording a deed with the appropriate government agency
renting
is often least expensive housing option -offers a set monthly expense- has minimal
maintenance responsiblity- provides the ablity to relocate realtively easily when your
lease expires-requires a contract- offers ammenities
security deposit
A sum of money usually equal to one month's rent, held by the landlord to cover any
damage to the apartment caused by a tenant.
subprime mortgages
home loans to borrowers with bad or no credit, has a higher rate of interest
survey
a means for determining property lines
title
legal document that proves ownership of the property
town house
A type of residential dwelling with two floors that is connected to one or more dwellings
by a common wall(s). Title to the unit and lot vest in the owner who shares a fractional
interest with other owners for the common areas.
interest rate changes in response to the movement of interest rates in the economy as a
whole
amortization
A method for computing equal periodic payments for an installment loan.
appraisal
An estimate of the current value of the property.
closing cost (points)
The expenses incurred (loan company fees, lawyer's fee, title transfer fee to the county,
etc) at the time of settlement when transferring property.
condominium
A multi-unit structure where a resident owns the unit together with an interest in the
common areas
contingency clause
a clause in a real estate sales contract that makes the agreement conditional on such
factors as the availability of financing, properly inspections, or obtaining expert advice
contractor
Independent business hired to provide production services
custom-built homes
usually designed by an architect to meet particular needs and wants of the builder
deed
A document that transfers ownership of property from one party to another.
down payment
A portion of the total cost of an item that must be paid at the time of purchase.
escrow account
An account where money is held in trust until it can be delivered to a designated party
fixed rate mortage
A loan in which the interest rate and payments remain the same
floor plan
a diagram of a home or other structure that shows the arrangement of rooms
frame house
a house made mostly of wood
home equity loan
Credit line offered by mortgage lenders that allows a homeowner to borrow money
against the equity in their home.
house
family dwelling that stands alone
inspection
checking out something before buying...looking for specific findings—expected or
unexpected
lease
a contract granting use or occupation of property during a specified time for a specified
payment
lowering home insurance
security system, smoke detectors, brick vs wood frame, raise your deductible, bundle
with car insurance, good credit
modular home
a home made up of separate boxlike sections that are built in a factory and assembled
at the site
mortgage
a loan to finance the purchase of real estate with specified payment periods and interest
rates
offer
A proposal by one party to another intended to create a legally binding agreement.
Terms must be clear, definite and certain
points
charged by the lender to obtain a loan, usually about 1% of the money borrowed
principal
the original amount of the loan, cost of the item
property insurance
A type of insurance that covers damage to property, such as a home, must have before
getting a loan
real estate broker
An agent authorized under state licensing laws to operate independently in the business
of buying and selling property
recording fees
Charges for recording a deed with the appropriate government agency
renting
is often least expensive housing option -offers a set monthly expense- has minimal
maintenance responsiblity- provides the ablity to relocate realtively easily when your
lease expires-requires a contract- offers ammenities
security deposit
A sum of money usually equal to one month's rent, held by the landlord to cover any
damage to the apartment caused by a tenant.
subprime mortgages
home loans to borrowers with bad or no credit, has a higher rate of interest
survey
a means for determining property lines
title
legal document that proves ownership of the property
town house
A type of residential dwelling with two floors that is connected to one or more dwellings
by a common wall(s). Title to the unit and lot vest in the owner who shares a fractional
interest with other owners for the common areas.
Investing
401K
A defined contribution plan that automatically takes out money from an employee's
paycheck before income taxes and invests it in mutual funds for purposes of retirement
savings
acquisitions
This is when another business buys out another by purchasing a majority stake in the
target company
annunity
saving account with an insurance company
appreciation
an increase in price or value
bear market
A steady drop in the stock market over a period of time
blue-chip stock
considered a safe investment that generally attracts conservative investors
bond
A form of lending to a company or the government (city, state, or federal)
bull market
A period of increased stock trading and rising stock prices
buying on a margin
the investor borrows money from their brokerage firm to buy stock
capital gains
The positive difference between the purchase price of a stock and its sale price.
commodity
A raw material or primary agricultural product that can be bought and sold, such as
copper or coffee.
common stock
basic ownership share; also generically called capital stock.
corporate bond
A bond that a corporation (company) issues to raise money to expand its business
cyclical stock
a stock which is greatly influenced by changes in the economic business cycle.
defensive stock
a stock that remains stable during declines in the economy
diversification
Buying several different investment alternatives to spread the risk of investing.
dividend
A distribution of profits by a corporation to its stockholders on a pro rate (equal) basis
dollar-cost averaging
Systematic investing of equal sums of money at regular intervals regardless of price
fluctuations in an investment
earnings
Portion of a company profit allocated to each outstanding share of common stock. For
instance, a corporation that earned $10 million last year and has 10 million shares
outstanding would report earnings of $1 per share. The figure is calculated after paying
taxes and after paying preferred shareholders and bondholders.
EE savings bonds
Government investment which you put down in cash half the face value and wait for it to
mature...usually used a investment for college
EPS (earning per share)
how much one stock is worth compared to a company's earnings
face value
The dollar amount that a bondholder (the person who owns a bond) will receive at the
bond's maturity.
growth stock
A stock from a company which has a consistent record of relatively rapid growth and
earnings in all economic conditions.
hostile take over
a takeover not solicited or approved by the target's management
I-Bond
a savings bond issued by the U.S. Treasury that protects investors from inflation or
purchasing power risk and has a fix rate
income stock
pays higher-than-average dividends compared to other stock issued
Index Fund
A low-fee portfolio of stocks that represents a related group
Individual Retirement Account (IRA)
Tax deferred account to which wage earners can contribute an amount up to a yearly
maximum.
investing
Committing money in the hope that it will make more money over time.
investment portfolio
The collection of investments you personally hold, including stocks, bonds, money
market accounts, and savings accounts.
IPO (Initial Public Offering)
selling a corporation stock on public markets for the first time
Large Cap Stock
stock from a corporation that has issued a large number of shares of stock and has a
large amount of capitalization
level of risk
is determined by comparing the risk of one asset to another
liquid assets
assets in the form of cash (or easily convertible into cash)
Market Capitalization
Market value of a company outstanding shares calculated by multiplying the current
share price by number of shares outstanding
maturity date
The date on which an investment becomes due for payment.
mergers
Joining of two or more companies or corporations.
Mid Cap Stock
A stock with market capitalization over $1 billion and less than $10 billion
money market fund
Mutual funds that invest in short-term, low-risk securities and allow investors to write
checks against their accounts
municipal bond
a bond issued by a state or local government or municipality to finance such
improvements as highways, state buildings, libraries, parks and schools
mutual funds
A group of investments held in common by many individual investors
net asset value
Total net value of its assets divided by the shares outstanding
net income
Excess of total revenues over total expenses
penny stock
Stock that costs less than $1 per share; extremely high risk
preferred stock
A special type of stock whose owners, though not generally having a say in running the
company, have a claim to profits before other stockholders do.
prospectus
A formal legal document, which is required by and filed with the Securities and
Exchange Commission, that provides details about an investment offering for sale to the
public.
REIT
Real Estate Investment Trust...owning and operating groups of properties
Roth IRA
A personal savings plan for retirement...earnings are tax-free
Securities Exchange Commission (SEC)
US government agency which oversees the operations of the stock markets which trade
stocks, bonds, and other types of securities.
security
A financial asset—such as a stock or a bond—that can be bought and sold in a financial
market (does not include real estate)
short trading a stock
To profit from a decrease in the price of a stock, a short seller borrows the shares and
sells them, expecting they will be cheaper to buy back in the future
S&P 500
An index of 500 large cap companies chosen based on their size, industry, and other
factors, used to represent the entire market
stock
A share of ownership in a corporation.
stockbroker
A person who links buyers and sellers of securities, must take a certification exam
stock split
An increase/decrease in the total number of authorized shares of a stock by a specified
amount but it does not decrease the total value
time value of money
need to know the interest rate and the inflation rate
Traditional IRA
money placed in a retirement account before taxes (tax deferred), taxed on withdrawal
treasury bills (T-bills)
short-term debt obligations the U.S. government sells to raise money
treasury notes
A marketable U.S. government debt security with a fixed interest rate and a maturity
between one and 10 years.
vesting
your right to at least a portion of the benefits you have under an employer pension plan,
after a certain time has past you have become fully vested and get full benefits
volatility
Indicates how much and how quickly the value of an investment, market, or market
sector changes.
yield
percentage of a return on an investment
zero coupon bond
A bond that pays no annual interest but is sold at a discount below par, thus
compensating investors in the form of capital appreciation
A defined contribution plan that automatically takes out money from an employee's
paycheck before income taxes and invests it in mutual funds for purposes of retirement
savings
acquisitions
This is when another business buys out another by purchasing a majority stake in the
target company
annunity
saving account with an insurance company
appreciation
an increase in price or value
bear market
A steady drop in the stock market over a period of time
blue-chip stock
considered a safe investment that generally attracts conservative investors
bond
A form of lending to a company or the government (city, state, or federal)
bull market
A period of increased stock trading and rising stock prices
buying on a margin
the investor borrows money from their brokerage firm to buy stock
capital gains
The positive difference between the purchase price of a stock and its sale price.
commodity
A raw material or primary agricultural product that can be bought and sold, such as
copper or coffee.
common stock
basic ownership share; also generically called capital stock.
corporate bond
A bond that a corporation (company) issues to raise money to expand its business
cyclical stock
a stock which is greatly influenced by changes in the economic business cycle.
defensive stock
a stock that remains stable during declines in the economy
diversification
Buying several different investment alternatives to spread the risk of investing.
dividend
A distribution of profits by a corporation to its stockholders on a pro rate (equal) basis
dollar-cost averaging
Systematic investing of equal sums of money at regular intervals regardless of price
fluctuations in an investment
earnings
Portion of a company profit allocated to each outstanding share of common stock. For
instance, a corporation that earned $10 million last year and has 10 million shares
outstanding would report earnings of $1 per share. The figure is calculated after paying
taxes and after paying preferred shareholders and bondholders.
EE savings bonds
Government investment which you put down in cash half the face value and wait for it to
mature...usually used a investment for college
EPS (earning per share)
how much one stock is worth compared to a company's earnings
face value
The dollar amount that a bondholder (the person who owns a bond) will receive at the
bond's maturity.
growth stock
A stock from a company which has a consistent record of relatively rapid growth and
earnings in all economic conditions.
hostile take over
a takeover not solicited or approved by the target's management
I-Bond
a savings bond issued by the U.S. Treasury that protects investors from inflation or
purchasing power risk and has a fix rate
income stock
pays higher-than-average dividends compared to other stock issued
Index Fund
A low-fee portfolio of stocks that represents a related group
Individual Retirement Account (IRA)
Tax deferred account to which wage earners can contribute an amount up to a yearly
maximum.
investing
Committing money in the hope that it will make more money over time.
investment portfolio
The collection of investments you personally hold, including stocks, bonds, money
market accounts, and savings accounts.
IPO (Initial Public Offering)
selling a corporation stock on public markets for the first time
Large Cap Stock
stock from a corporation that has issued a large number of shares of stock and has a
large amount of capitalization
level of risk
is determined by comparing the risk of one asset to another
liquid assets
assets in the form of cash (or easily convertible into cash)
Market Capitalization
Market value of a company outstanding shares calculated by multiplying the current
share price by number of shares outstanding
maturity date
The date on which an investment becomes due for payment.
mergers
Joining of two or more companies or corporations.
Mid Cap Stock
A stock with market capitalization over $1 billion and less than $10 billion
money market fund
Mutual funds that invest in short-term, low-risk securities and allow investors to write
checks against their accounts
municipal bond
a bond issued by a state or local government or municipality to finance such
improvements as highways, state buildings, libraries, parks and schools
mutual funds
A group of investments held in common by many individual investors
net asset value
Total net value of its assets divided by the shares outstanding
net income
Excess of total revenues over total expenses
penny stock
Stock that costs less than $1 per share; extremely high risk
preferred stock
A special type of stock whose owners, though not generally having a say in running the
company, have a claim to profits before other stockholders do.
prospectus
A formal legal document, which is required by and filed with the Securities and
Exchange Commission, that provides details about an investment offering for sale to the
public.
REIT
Real Estate Investment Trust...owning and operating groups of properties
Roth IRA
A personal savings plan for retirement...earnings are tax-free
Securities Exchange Commission (SEC)
US government agency which oversees the operations of the stock markets which trade
stocks, bonds, and other types of securities.
security
A financial asset—such as a stock or a bond—that can be bought and sold in a financial
market (does not include real estate)
short trading a stock
To profit from a decrease in the price of a stock, a short seller borrows the shares and
sells them, expecting they will be cheaper to buy back in the future
S&P 500
An index of 500 large cap companies chosen based on their size, industry, and other
factors, used to represent the entire market
stock
A share of ownership in a corporation.
stockbroker
A person who links buyers and sellers of securities, must take a certification exam
stock split
An increase/decrease in the total number of authorized shares of a stock by a specified
amount but it does not decrease the total value
time value of money
need to know the interest rate and the inflation rate
Traditional IRA
money placed in a retirement account before taxes (tax deferred), taxed on withdrawal
treasury bills (T-bills)
short-term debt obligations the U.S. government sells to raise money
treasury notes
A marketable U.S. government debt security with a fixed interest rate and a maturity
between one and 10 years.
vesting
your right to at least a portion of the benefits you have under an employer pension plan,
after a certain time has past you have become fully vested and get full benefits
volatility
Indicates how much and how quickly the value of an investment, market, or market
sector changes.
yield
percentage of a return on an investment
zero coupon bond
A bond that pays no annual interest but is sold at a discount below par, thus
compensating investors in the form of capital appreciation
Car Insurance
24/7 Roadside assistance
all day you can call to get help if your vehicle breaks down
50/200/30
In an accident: $50,000 of coverage per person in the other car/$200,000 total medical payment for other people/$30,000 for the other vehicle repair
"Acts of God" insurance
earthquake, flood, tornado, etc
appraisal
an estimate of the current value of property
assigned risk pool
grouping people by their different levels of risk management
bodily injury liability
coverage that protects you when you are responsible for an auto accident/accident in the home that results in the injury or death of other parties
car insurance discounts
anti-thief, good student, multiple vehicles, driving record, good credit report
claim
A request for consideration, compensation, or payment under the terms of a legally binding contract
Claims Adjusters
investigate insurance claims by interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the company's liability.
collision
covers a collision with another object, car, or from a rollover; paid regardless of fault
comprehensive
acts of god, everything other than collision
comprehensive insurance
insurance coverage that helps pay for losses to an insured car due to fire, theft, or other losses that are not the result of a collision as stated in the insured's policy
cost of car insurance
depends on age, gender, martial status, type of car, location, driving record
deductible
the amount you must pay before insurance begins to pay
depreciation
a decrease in the value of property as result of age or wear and tear
down payment
a portion of the total cost of an item that must be paid at the time of purchase
filing a claim
reporting an accident to your insurance company that involved damages
importance of insurance
protecting financial lost from unpredictable events
no-fault auto insurance
an accident occurs, and each policyholder makes a claim to his or her own insurance company
Personal Injury Protection (PIP)
can be added that gives coverage for medical, hospital, and funeral costs of the insured and passengers in the event of an auto accident
policyholder
when you buy an insurance policy
premium
when you pay a set amount of money to the insurance company on a regular basis to pay for a policy
property damage liability
protects you when your are responsible for an auto accident in which the property of others is damaged
reduces the cost of insurance
increasing your deductible, no collision insurance, avoid submitting small claims
replacement value insurance
covers the cost of a new item
Towing and Labor
an extra coverage that pays up to a stated amount for towing your car and any labor required at the scene when your car becomes disabled.
Transportation cost
if a rental car is needed
underinsured
having inadequate insurance coverage
all day you can call to get help if your vehicle breaks down
50/200/30
In an accident: $50,000 of coverage per person in the other car/$200,000 total medical payment for other people/$30,000 for the other vehicle repair
"Acts of God" insurance
earthquake, flood, tornado, etc
appraisal
an estimate of the current value of property
assigned risk pool
grouping people by their different levels of risk management
bodily injury liability
coverage that protects you when you are responsible for an auto accident/accident in the home that results in the injury or death of other parties
car insurance discounts
anti-thief, good student, multiple vehicles, driving record, good credit report
claim
A request for consideration, compensation, or payment under the terms of a legally binding contract
Claims Adjusters
investigate insurance claims by interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the company's liability.
collision
covers a collision with another object, car, or from a rollover; paid regardless of fault
comprehensive
acts of god, everything other than collision
comprehensive insurance
insurance coverage that helps pay for losses to an insured car due to fire, theft, or other losses that are not the result of a collision as stated in the insured's policy
cost of car insurance
depends on age, gender, martial status, type of car, location, driving record
deductible
the amount you must pay before insurance begins to pay
depreciation
a decrease in the value of property as result of age or wear and tear
down payment
a portion of the total cost of an item that must be paid at the time of purchase
filing a claim
reporting an accident to your insurance company that involved damages
importance of insurance
protecting financial lost from unpredictable events
no-fault auto insurance
an accident occurs, and each policyholder makes a claim to his or her own insurance company
Personal Injury Protection (PIP)
can be added that gives coverage for medical, hospital, and funeral costs of the insured and passengers in the event of an auto accident
policyholder
when you buy an insurance policy
premium
when you pay a set amount of money to the insurance company on a regular basis to pay for a policy
property damage liability
protects you when your are responsible for an auto accident in which the property of others is damaged
reduces the cost of insurance
increasing your deductible, no collision insurance, avoid submitting small claims
replacement value insurance
covers the cost of a new item
Towing and Labor
an extra coverage that pays up to a stated amount for towing your car and any labor required at the scene when your car becomes disabled.
Transportation cost
if a rental car is needed
underinsured
having inadequate insurance coverage
Health Insuance
beneficiary
A person who receives something from someone else such as an inheritance
Co-insurance
the percentage of the bill for services that the policy holder must pay
Co-payment (co-pay)
a small fixed fee paid by the patient at the time of an office visit
Disability Insurance
A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.
Health care deductibles
usually paid per year
HMO
health maintenance organization, managed health care plan
HSA (Health Savings Account)
Health insurance that includes a savings account that allows you to pay for healthcare on tax-free basis
In Network Doctors
A group of doctors approved by your health insurance company
open enrollment period
specific periods of time when employees choose a particular set of benefits for their health care
Out of Network Doctors
Doctors not approved by your health insurance company
Out-of-pocket expense
Specific amount of money that you pay, the insurance company cover everything after that for the year
out-patient
a patient who receives medical treatment without being admitted to a hospital.
PPO
Preferred provider organization. A prepaid health insurance plan in which providers agree to deliver services for discount fees; patients can go to any provider, but using nonparticipating providers results in higher costs to the patient
Pre-existing condition
any medical condition that was diagnosed and/or treated within a specified period of time immediately preceding the enrollee's effective date of coverage.
primary care provider
a healthcare professional who handles general care
risk pool
created when a number of people are grouped for insurance purposes (e.g., employees of an organization); the cost of health care coverage is determined by employees' health status, age, sex, and occupation.
Term Insurance
Life insurance coverage for a specified period of time, less expensive than whole
whole life insurance
life insurance that pays a benefit on the death of the insured and also accumulates a cash value.
A person who receives something from someone else such as an inheritance
Co-insurance
the percentage of the bill for services that the policy holder must pay
Co-payment (co-pay)
a small fixed fee paid by the patient at the time of an office visit
Disability Insurance
A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.
Health care deductibles
usually paid per year
HMO
health maintenance organization, managed health care plan
HSA (Health Savings Account)
Health insurance that includes a savings account that allows you to pay for healthcare on tax-free basis
In Network Doctors
A group of doctors approved by your health insurance company
open enrollment period
specific periods of time when employees choose a particular set of benefits for their health care
Out of Network Doctors
Doctors not approved by your health insurance company
Out-of-pocket expense
Specific amount of money that you pay, the insurance company cover everything after that for the year
out-patient
a patient who receives medical treatment without being admitted to a hospital.
PPO
Preferred provider organization. A prepaid health insurance plan in which providers agree to deliver services for discount fees; patients can go to any provider, but using nonparticipating providers results in higher costs to the patient
Pre-existing condition
any medical condition that was diagnosed and/or treated within a specified period of time immediately preceding the enrollee's effective date of coverage.
primary care provider
a healthcare professional who handles general care
risk pool
created when a number of people are grouped for insurance purposes (e.g., employees of an organization); the cost of health care coverage is determined by employees' health status, age, sex, and occupation.
Term Insurance
Life insurance coverage for a specified period of time, less expensive than whole
whole life insurance
life insurance that pays a benefit on the death of the insured and also accumulates a cash value.
Insurance
50/200/30
In an accident: $50,000 of coverage per person/$200,000 total payment/$30,000 for the other vehical's repair
"Acts of God" insurance
earthquake, flood, tornado, etc
Actuary
an insurance analyst and statistician
appraisal
an estimate of the current value of property
assigned risk pool
grouping people by their different levels of risk management
beneficiary
a person or organization named by the policyholder to receive assets after the policyholder's death
bodily injury liability
coverage that protects you when you are responsible for an auto accident/accident in the home that results in the injury or death of other parties
bonded
When an employer obtains a fidelity bond from an insurance company, which will cover losses from employee dishonest acts (e.g., embezzlement, theft).
car insurance discounts
anti-thief, good student, multiple vehicles, driving record, good credit report
claim
A request for consideration, compensation, or payment under the terms of a legally binding contract
Claims Adjusters
investigate insurance claims by interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the company's liability.
COBRA
Consolidated Omnibus Budget Reconciliation Act...can continue health care after leaving a job for a limited time
coinsurance
a percentage of the service cost that patients pay
collision
covers a collision with another object, car, or from a rollover; paid regardless of fault
comprehensive insurance
insurance coverage that helps pay for losses to an insured car due to fire, theft, or other losses that are not the result of a collision as stated in the insured's policy
co-payment
a flat fee the patient must pay for medical services, can vary by plans and where a person rec
cost of car insurance
depends on age, gender, martial status, type of car, location, driving record
deductible
the amount you must pay before insurance begins to pay
dependent
an individual who relies on someone else for financial support, such as a child, a spouse, or an elderly parent
depreciation
a decrease in the value of property as result of age or wear and tear
disability insurance
covers a person when they can not work
endowment insurance
pays a lump sum after a period of time usually 10, 15, or 20 years or payment on death
exclusion
refer to medical services that are not covered
Extended Warranty
additional coverage that you can buy to pay for repairs or replacements needed beyond the original warranty period
face value
a set amount on a insurance policy that is due upon the death of the policy holder to their beneficiaries
filing a claim
reporting an accident to your insurance company that involved damages
floater policy
covers items wherever you take them...jewelry, laptops, etc.
frame house
the structure of the house is made of wood
HMO
Health Maintenance Organization...managed health care plan, usually required to see your primary care doctor first
home owner insurance discounts
anti-thief, smoke detector, nonsmoker, age of structure, style of structure, bundling car and house
home owner's bodily liability insurance
covers accidents on your property
HSA (Health Savings Account)
tax free, lowers premium for high deductible plan, funds roll over year after year
importance of insurance
protecting financial lost from unpredictable events
inpatient
a person whose care requires a stay in a hospital
long term care insurance
for older citizens needing adult care like nursing in home or a retirement home
managed care plan
contract with specific doctors, hospitals, and other health care providers to deliver medical services and preventive care to members at reduced cost
Medicaid
health care for low income and certain disabilities
Medicare
health care for citizens 65 and older
no-fault auto insurance
an accident occurs, and each policyholder makes a claim to his or her own insurance company
out of pocket expenses
actual amount the policy holder spent on health care
out patient
may receive care in a hospital but no over night stay, cost much less than over night care
Personal Injury Protection (PIP)
Automobile insurance that pays for medical, hospital, and funeral costs of the insured's family and passengers, regardless of fault
policyholder
when you buy an insurance policy
PPO (Preferred Provider Organization)
A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network. You don't have to go to a primary care taker first.
preexisting condition
an illness or an injury you had before signing up for health care insurance
premium
when you pay a set amount of money to the insurance company on a regular basis to pay for a policy
primary care taker
a doctor that controls a person's health care choices
property damage liability
protects you when your are responsible for an auto accident in which the property of others is damaged
red lining
placing a red circle on a map around high insurance risk areas
reduces the cost of insurance
increasing your deductible, no collision insurance, avoid submitting small claims
renter's insurance
covers only the personal property in the dwelling
replacement value insurance
covers the cost of a new item
rider/endorsement policy
an additional insurance policy added for other items such as paintings, jewelry, antiques
risk
a measure of the likelihood that something will be lost
risk management
the process of measuring risk and finding ways to minimize or manage loss
risks factors
where you live (area), type of home (frame/brick), used in determining your coverage
shared risk
when people assume the risk of insurance as a group
term life insurance
provides protection only for a specific period of time
umbrella policy
Insurance policy that covers amounts above those covered under one or more other primary policies, and which does not pay until the losses exceed a certain sum. Also called excess insurance...an additional personal liability insurance
whole life insurance
provides basic lifetime protections so long as premiums are paid
Workman's Compensation
payments to a worker injured on the job
In an accident: $50,000 of coverage per person/$200,000 total payment/$30,000 for the other vehical's repair
"Acts of God" insurance
earthquake, flood, tornado, etc
Actuary
an insurance analyst and statistician
appraisal
an estimate of the current value of property
assigned risk pool
grouping people by their different levels of risk management
beneficiary
a person or organization named by the policyholder to receive assets after the policyholder's death
bodily injury liability
coverage that protects you when you are responsible for an auto accident/accident in the home that results in the injury or death of other parties
bonded
When an employer obtains a fidelity bond from an insurance company, which will cover losses from employee dishonest acts (e.g., embezzlement, theft).
car insurance discounts
anti-thief, good student, multiple vehicles, driving record, good credit report
claim
A request for consideration, compensation, or payment under the terms of a legally binding contract
Claims Adjusters
investigate insurance claims by interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the company's liability.
COBRA
Consolidated Omnibus Budget Reconciliation Act...can continue health care after leaving a job for a limited time
coinsurance
a percentage of the service cost that patients pay
collision
covers a collision with another object, car, or from a rollover; paid regardless of fault
comprehensive insurance
insurance coverage that helps pay for losses to an insured car due to fire, theft, or other losses that are not the result of a collision as stated in the insured's policy
co-payment
a flat fee the patient must pay for medical services, can vary by plans and where a person rec
cost of car insurance
depends on age, gender, martial status, type of car, location, driving record
deductible
the amount you must pay before insurance begins to pay
dependent
an individual who relies on someone else for financial support, such as a child, a spouse, or an elderly parent
depreciation
a decrease in the value of property as result of age or wear and tear
disability insurance
covers a person when they can not work
endowment insurance
pays a lump sum after a period of time usually 10, 15, or 20 years or payment on death
exclusion
refer to medical services that are not covered
Extended Warranty
additional coverage that you can buy to pay for repairs or replacements needed beyond the original warranty period
face value
a set amount on a insurance policy that is due upon the death of the policy holder to their beneficiaries
filing a claim
reporting an accident to your insurance company that involved damages
floater policy
covers items wherever you take them...jewelry, laptops, etc.
frame house
the structure of the house is made of wood
HMO
Health Maintenance Organization...managed health care plan, usually required to see your primary care doctor first
home owner insurance discounts
anti-thief, smoke detector, nonsmoker, age of structure, style of structure, bundling car and house
home owner's bodily liability insurance
covers accidents on your property
HSA (Health Savings Account)
tax free, lowers premium for high deductible plan, funds roll over year after year
importance of insurance
protecting financial lost from unpredictable events
inpatient
a person whose care requires a stay in a hospital
long term care insurance
for older citizens needing adult care like nursing in home or a retirement home
managed care plan
contract with specific doctors, hospitals, and other health care providers to deliver medical services and preventive care to members at reduced cost
Medicaid
health care for low income and certain disabilities
Medicare
health care for citizens 65 and older
no-fault auto insurance
an accident occurs, and each policyholder makes a claim to his or her own insurance company
out of pocket expenses
actual amount the policy holder spent on health care
out patient
may receive care in a hospital but no over night stay, cost much less than over night care
Personal Injury Protection (PIP)
Automobile insurance that pays for medical, hospital, and funeral costs of the insured's family and passengers, regardless of fault
policyholder
when you buy an insurance policy
PPO (Preferred Provider Organization)
A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network. You don't have to go to a primary care taker first.
preexisting condition
an illness or an injury you had before signing up for health care insurance
premium
when you pay a set amount of money to the insurance company on a regular basis to pay for a policy
primary care taker
a doctor that controls a person's health care choices
property damage liability
protects you when your are responsible for an auto accident in which the property of others is damaged
red lining
placing a red circle on a map around high insurance risk areas
reduces the cost of insurance
increasing your deductible, no collision insurance, avoid submitting small claims
renter's insurance
covers only the personal property in the dwelling
replacement value insurance
covers the cost of a new item
rider/endorsement policy
an additional insurance policy added for other items such as paintings, jewelry, antiques
risk
a measure of the likelihood that something will be lost
risk management
the process of measuring risk and finding ways to minimize or manage loss
risks factors
where you live (area), type of home (frame/brick), used in determining your coverage
shared risk
when people assume the risk of insurance as a group
term life insurance
provides protection only for a specific period of time
umbrella policy
Insurance policy that covers amounts above those covered under one or more other primary policies, and which does not pay until the losses exceed a certain sum. Also called excess insurance...an additional personal liability insurance
whole life insurance
provides basic lifetime protections so long as premiums are paid
Workman's Compensation
payments to a worker injured on the job
Money Management
accountant
a person that handles the books, taxes, and finances for an individual or business
Arbitration
settling a dispute by agreeing to accept the decision of an impartial outsider
assets
Anything of value that is owned
assisted living facility
A housing option providing care for elderly people who have instrumental ADL impairments and can no longer live independently but may not need a nursing home.
balance budget
expenses, savings, investments equal income
balance sheet
a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time
Better Business Bureau
A non-profit organization sponsored by local businesses to provide general information on companies. It maintains records on consumer inquiries and complaints and sometimes offers various consumer education programs.
budget
a financial plan
Capitalization
the total amount of stocks and bonds issued by a corporation
commercial property
land and buildings that produce rental income
comparison shopping
comparing prices, warranties, customer service, and other elements when making a purchase
convertible bonds
Bonds that can be converted into common stock at the bondholder's option
cooperative
A business that is owned by the members it serves and is managed in their interest.
current liabilities
monetary obligations due within a short time, usually within a year
deficit
expenses exceed income
demographics
statistical data relating to the population and particular groups within it...age, sex, religion, race, etc
dependents
people that need you for income and support
discretionary income
money after taxes, deductions, and necessary expenses
disposable income
money after taxes and deductions
diversified portfolio
an investor who has holdings in several different industries; Don't put all your eggs in one basket.
equity
monetary value of a property minus the amount owed on the property
fix expense
budget items that stay the same from month to month...car payments, mortgage
fringe benefits/employee benefits
additional pay, leave, health care offered to employees above their normal pay
gross pay
the total amount a person earns before taxes and deductions
human capital
the skills and knowledge gained by a worker through education and experience
identity theft
A crime that involves someone pretending to be another person in order to steal money or obtain benefits
impulse buying
seeing an item and purchasing it without a previous plan to buy it
insolvent
unable to pay debts owed
installments
a specified amount a borrower agrees to repay for a loan.
Insurance sales person
They help insurance companies generate new business by contacting potential customers and selling one or more types of insurance
investments
savings that are put to work to earn more money
landlord
The owner of property that is leased or rented to another
lay away plan
making payments on an item a store holds until paid off...no interest
liability
a debt
life cycle
a person will have different needs at different times in their life
liquidation
Closing down the operations of a business and selling its assets and operations to pay its debts and distribute any gains to stockholders.
liquidity
A measure of the ease with which an asset can be converted into money without a significant loss of value.
long term goal
generally a plan for more than a couple of years
mobility
the quality or state of being able to move about freely
Mortgage Banker
a person or firm not otherwise in banking, who provides independent funds for mortgage financing as opposed to banks that rely on deposits of funds to originate loans
net pay
also called take home pay
net worth
total assets minus total liabilities
net worth statement
a formal report that shows what an individual owns, what an individual owes, and the difference between the two.
opportunity cost
the difference between two choices
over the counter market
exchange that provides a means to trade stocks not listed on the national exchanges
"pay yourself first"
a strategy to help everyone obtain financial security
philanthropy
efforts to improve the well-being of humankind, generally through giving money
phishing
An attack that sends an email or displays a Web announcement that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information
predatory lending
taking advantage of consumers who are in financial trouble through excessively high fees and interest rates for credit
promissory note
a written and signed promise to pay a sum of money at a specified time
Realtor (Real Estate Broker)
Any real estate licensee who is a member of the National Association of REALTORS (NAR), assists in selling property, houses, or rentals
revolving credit
A form of credit in which the total amount of the bill does not have to be paid each month
risk tolerance
the degree of uncertainty that an investor can handle in regard to a negative change in the value of his or her portfolio.
Rule of 72
The number of years it takes for a certain amount to double in value is equal to 72 divided by its annual rate of interest.
sedentary lifestyle
a way of life that involves little physical activity
small claims court
a court that deals with legal disputes that involve amounts below a certain limit
speculator
person who risks money in order to make a large profit
Stock Broker
an individual license to buy and sell stocks on behalf of others
a person that handles the books, taxes, and finances for an individual or business
Arbitration
settling a dispute by agreeing to accept the decision of an impartial outsider
assets
Anything of value that is owned
assisted living facility
A housing option providing care for elderly people who have instrumental ADL impairments and can no longer live independently but may not need a nursing home.
balance budget
expenses, savings, investments equal income
balance sheet
a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time
Better Business Bureau
A non-profit organization sponsored by local businesses to provide general information on companies. It maintains records on consumer inquiries and complaints and sometimes offers various consumer education programs.
budget
a financial plan
Capitalization
the total amount of stocks and bonds issued by a corporation
commercial property
land and buildings that produce rental income
comparison shopping
comparing prices, warranties, customer service, and other elements when making a purchase
convertible bonds
Bonds that can be converted into common stock at the bondholder's option
cooperative
A business that is owned by the members it serves and is managed in their interest.
current liabilities
monetary obligations due within a short time, usually within a year
deficit
expenses exceed income
demographics
statistical data relating to the population and particular groups within it...age, sex, religion, race, etc
dependents
people that need you for income and support
discretionary income
money after taxes, deductions, and necessary expenses
disposable income
money after taxes and deductions
diversified portfolio
an investor who has holdings in several different industries; Don't put all your eggs in one basket.
equity
monetary value of a property minus the amount owed on the property
fix expense
budget items that stay the same from month to month...car payments, mortgage
fringe benefits/employee benefits
additional pay, leave, health care offered to employees above their normal pay
gross pay
the total amount a person earns before taxes and deductions
human capital
the skills and knowledge gained by a worker through education and experience
identity theft
A crime that involves someone pretending to be another person in order to steal money or obtain benefits
impulse buying
seeing an item and purchasing it without a previous plan to buy it
insolvent
unable to pay debts owed
installments
a specified amount a borrower agrees to repay for a loan.
Insurance sales person
They help insurance companies generate new business by contacting potential customers and selling one or more types of insurance
investments
savings that are put to work to earn more money
landlord
The owner of property that is leased or rented to another
lay away plan
making payments on an item a store holds until paid off...no interest
liability
a debt
life cycle
a person will have different needs at different times in their life
liquidation
Closing down the operations of a business and selling its assets and operations to pay its debts and distribute any gains to stockholders.
liquidity
A measure of the ease with which an asset can be converted into money without a significant loss of value.
long term goal
generally a plan for more than a couple of years
mobility
the quality or state of being able to move about freely
Mortgage Banker
a person or firm not otherwise in banking, who provides independent funds for mortgage financing as opposed to banks that rely on deposits of funds to originate loans
net pay
also called take home pay
net worth
total assets minus total liabilities
net worth statement
a formal report that shows what an individual owns, what an individual owes, and the difference between the two.
opportunity cost
the difference between two choices
over the counter market
exchange that provides a means to trade stocks not listed on the national exchanges
"pay yourself first"
a strategy to help everyone obtain financial security
philanthropy
efforts to improve the well-being of humankind, generally through giving money
phishing
An attack that sends an email or displays a Web announcement that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information
predatory lending
taking advantage of consumers who are in financial trouble through excessively high fees and interest rates for credit
promissory note
a written and signed promise to pay a sum of money at a specified time
Realtor (Real Estate Broker)
Any real estate licensee who is a member of the National Association of REALTORS (NAR), assists in selling property, houses, or rentals
revolving credit
A form of credit in which the total amount of the bill does not have to be paid each month
risk tolerance
the degree of uncertainty that an investor can handle in regard to a negative change in the value of his or her portfolio.
Rule of 72
The number of years it takes for a certain amount to double in value is equal to 72 divided by its annual rate of interest.
sedentary lifestyle
a way of life that involves little physical activity
small claims court
a court that deals with legal disputes that involve amounts below a certain limit
speculator
person who risks money in order to make a large profit
Stock Broker
an individual license to buy and sell stocks on behalf of others
Earnings and Taxes
1040
Tax form used by people who make over a certain amount or itemize their deductions
1040 EZ
Simple tax return form, often filled out by young people sometimes called the "short form"
adjusted gross income
the amount of money you made after adding additional income as in interest, dividends, etc
bonus
money added to an employee's base pay
capital gains
The positive difference between the purchase price of a stock and its sale price
commission
An amount paid to an employee based on a percentage of the employee's sales.
compensation
payments and benefits received for work
corporate income tax
a tax a corporation pays on it's profits
direct tax
A tax, such as income tax, that is levied on the income or profits of the person/corporation who pays it, rather than on goods or services.
disability
A mental or physical impairment that substantially limits one or more major life activities.
discretionary expenses
expense categories that are not absolutely necessary
earned income
the money you receive from employment
earned income credit (EIC)
the amount of adjustment as a tax credit for low earners
employee benefits (fringe benefits)
rewards that employees receive for being members of the organization and for their positions in the organization; usually not related to employee performance, usually not in the form of money
entitlement
A required spending by the government that continues year to year without the necessity of passing a new bill
estate tax
A tax on the estate, or total value of the money and property, of a person who has died
excise tax
Consumer tax on a specific kind of merchandise, such as tobacco, alcohol, firearms, gasoline, and luxury items.
Federal Insurance Contributions Act (FICA)
A federal law that requires an employer to withhold taxes from the wages they pay their employees; the funds go toward Social Security and Medicare
Form 1099
Form sent by the financial institutions stating how much interest you earned, dividends, and other earnings... copy is sent to the government
Form W-2
Annual report by an employer to each employee showing the employee's wages subject to FICA and federal income taxes along with amounts withheld
Form W-4
A form that you fill out to provide the information your employer needs to determine the proper amount to withhold from your paycheck
gift tax
Tax on gifts above $11,000 to any one person given in any one year
gross income
the total amount of income from wages before any payroll deductions
indirect tax
a tax levied on goods or services rather than on persons or organizations
interest
A sum paid or charged for the use of money or for borrowing money
IRS
Internal Revenue Service, resposible for collecting federal taxes
itemize deductions
expenses you can subtract from adjusted gross income to determine your taxable income
married filing jointly
you and your spouse are filing a return together
Medicaid
A public assistance program designed to provide healthcare to poor Americans.
Medicare
A federal program of health insurance for persons 65 years of age and older
minimum wage
Lowest legal wage that can be paid to most workers.
net income
Excess of total revenues over total expenses called net earnings or net profit. In terms of pay checks it is also called take-home pay.
networking (referring to jobs)
making contacts
payroll deductions
are the amounts subtracted from gross income which results in your net income
personal income tax
a tax levied on the taxable income of individuals, households, and unincorporated firms
piecework income
A wage that is based on a rate per unit or item completed.
progressive tax
A tax for which the percentage of income paid in taxes increases as income increases
property tax
A tax levied on the value of physical assets - either real or personal properties.
proportional tax
A tax in which the average tax rate is the same at all income levels.
regressive tax
A tax for which the percentage of income paid in taxes decreases as income increases, hurts lower income people, sales tax, gas tax, etc
salary
A fixed amount of money paid to an employee for each pay period.
sales tax
A tax based on the cost of the item purchased and collected directly from the buyer
Social Security
A 1935 law passed during the Great Depression that set up a system of pensions for older people and set up the nation's first system of unemployment insurance.
taxable income
the actual amount of money you pay taxes on
tax allowances
amounts calculated on the Form W-4 that reduce the federal tax withheld from a person's paycheck, such as dependants, the taxer payer, and other exemptions
tax audit
A reveiw of a tax return by the IRS in which the taxpayer must show proof of all deductions, expenses, and income.
tax credit
An amount subtracted directly from the tax owed
tax deduction
Expense that a taxpayer is allowed to deduct from taxable income; examples include money paid as home mortgage interest and charitable donations.
tax exemption
A number that includes the taxpayer and any dependents. Because most teens are listed as dependents on their parents taxes, their tax exemption is 0.
tax preparer
prepares tax returns for clients, do make mistakes, have to pay for the service
tax refund
A check returning the taxpayers money to the taxpayer after tax returns are filed and the over paid tax is determined.
tip
gratuity, money paid for services beyond what is required
unearned income
Money received from sources other than working in a job
US Treasury Bonds
Debt issued by the federal government and the interest is taxed only at the Federal level
wage
An amount of money paid to an employee at a specific rate per hour worked.
windfall income
any type of additional income over expenses that is completely unexpected
Tax form used by people who make over a certain amount or itemize their deductions
1040 EZ
Simple tax return form, often filled out by young people sometimes called the "short form"
adjusted gross income
the amount of money you made after adding additional income as in interest, dividends, etc
bonus
money added to an employee's base pay
capital gains
The positive difference between the purchase price of a stock and its sale price
commission
An amount paid to an employee based on a percentage of the employee's sales.
compensation
payments and benefits received for work
corporate income tax
a tax a corporation pays on it's profits
direct tax
A tax, such as income tax, that is levied on the income or profits of the person/corporation who pays it, rather than on goods or services.
disability
A mental or physical impairment that substantially limits one or more major life activities.
discretionary expenses
expense categories that are not absolutely necessary
earned income
the money you receive from employment
earned income credit (EIC)
the amount of adjustment as a tax credit for low earners
employee benefits (fringe benefits)
rewards that employees receive for being members of the organization and for their positions in the organization; usually not related to employee performance, usually not in the form of money
entitlement
A required spending by the government that continues year to year without the necessity of passing a new bill
estate tax
A tax on the estate, or total value of the money and property, of a person who has died
excise tax
Consumer tax on a specific kind of merchandise, such as tobacco, alcohol, firearms, gasoline, and luxury items.
Federal Insurance Contributions Act (FICA)
A federal law that requires an employer to withhold taxes from the wages they pay their employees; the funds go toward Social Security and Medicare
Form 1099
Form sent by the financial institutions stating how much interest you earned, dividends, and other earnings... copy is sent to the government
Form W-2
Annual report by an employer to each employee showing the employee's wages subject to FICA and federal income taxes along with amounts withheld
Form W-4
A form that you fill out to provide the information your employer needs to determine the proper amount to withhold from your paycheck
gift tax
Tax on gifts above $11,000 to any one person given in any one year
gross income
the total amount of income from wages before any payroll deductions
indirect tax
a tax levied on goods or services rather than on persons or organizations
interest
A sum paid or charged for the use of money or for borrowing money
IRS
Internal Revenue Service, resposible for collecting federal taxes
itemize deductions
expenses you can subtract from adjusted gross income to determine your taxable income
married filing jointly
you and your spouse are filing a return together
Medicaid
A public assistance program designed to provide healthcare to poor Americans.
Medicare
A federal program of health insurance for persons 65 years of age and older
minimum wage
Lowest legal wage that can be paid to most workers.
net income
Excess of total revenues over total expenses called net earnings or net profit. In terms of pay checks it is also called take-home pay.
networking (referring to jobs)
making contacts
payroll deductions
are the amounts subtracted from gross income which results in your net income
personal income tax
a tax levied on the taxable income of individuals, households, and unincorporated firms
piecework income
A wage that is based on a rate per unit or item completed.
progressive tax
A tax for which the percentage of income paid in taxes increases as income increases
property tax
A tax levied on the value of physical assets - either real or personal properties.
proportional tax
A tax in which the average tax rate is the same at all income levels.
regressive tax
A tax for which the percentage of income paid in taxes decreases as income increases, hurts lower income people, sales tax, gas tax, etc
salary
A fixed amount of money paid to an employee for each pay period.
sales tax
A tax based on the cost of the item purchased and collected directly from the buyer
Social Security
A 1935 law passed during the Great Depression that set up a system of pensions for older people and set up the nation's first system of unemployment insurance.
taxable income
the actual amount of money you pay taxes on
tax allowances
amounts calculated on the Form W-4 that reduce the federal tax withheld from a person's paycheck, such as dependants, the taxer payer, and other exemptions
tax audit
A reveiw of a tax return by the IRS in which the taxpayer must show proof of all deductions, expenses, and income.
tax credit
An amount subtracted directly from the tax owed
tax deduction
Expense that a taxpayer is allowed to deduct from taxable income; examples include money paid as home mortgage interest and charitable donations.
tax exemption
A number that includes the taxpayer and any dependents. Because most teens are listed as dependents on their parents taxes, their tax exemption is 0.
tax preparer
prepares tax returns for clients, do make mistakes, have to pay for the service
tax refund
A check returning the taxpayers money to the taxpayer after tax returns are filed and the over paid tax is determined.
tip
gratuity, money paid for services beyond what is required
unearned income
Money received from sources other than working in a job
US Treasury Bonds
Debt issued by the federal government and the interest is taxed only at the Federal level
wage
An amount of money paid to an employee at a specific rate per hour worked.
windfall income
any type of additional income over expenses that is completely unexpected
Financial Literacy
arbitration
settling a dispute by agreeing to accept the decision of an impartial outsider
assisted living facility
residence complex that provides personal and medical services for the elderly
bait and switch
A store advertises bargains that do not really exist to lure customers in, in hopes that they will buy more expensive merchandise.
budget
is a spending plan for the use of money over timed based on goals and expected income
capitalization
the total amount of stocks and bonds issued by a corporation
cash flow statement
a summary of the amount of money received as well as the amount paid out for goods and services during a specific period
cash inflow
income from your job, investments, and other sources
cash outflow
amounts spent for food, clothing, transportation, and other living costs (for personal use...can also mean money spent on running a business)
check cashing store
a non-bank institution that provides check-cashing services for consumers who don't have a bank account; fees are usually relatively high
civil suit
when one sues another (or corporation) for violation of their rights
class action suit
A case brought by someone to help him or her and all others who are similarly situated
collectibles
items of personal interest to collectors that can increase in value in the future but may also may lose value...risky
commercial property
land and buildings that produce rental income
Competitive Funding Grant
Funding is based on the merits of the application, and recipients are not pre-determined.
Continuation funding grant
Offers current award recipients the option of renewing grants for the following year
convertible bonds
bonds that can be converted into common stock at the bondholder's option
cooperative
a business organization owned and operated by a group of individuals for their mutual benefit
Cost Of Living
The average cost of basic necessities, such as housing and food
demographics
the statistical characteristics of the population
discretionary expense
cover items and services that are not necessary for maintaining your home or life
Dumpster Diving
Going into a trash can for documents that can be used for identity theft
expense
is the cost of goods and services you buy
extended warranty
additional coverage that you can buy to pay for repairs or replacements needed beyond the original warranty period
family crisis
a major problem that impacts the future of the family and its lifestyle
family life cycle
refers to the stages a family passes through from formation to aging
financial literacy
the understanding of the basic knowledge and skills needed to manage financial resources
fine print
A part of an agreement spelling out restrictions or limitations often in small type or obscure language.
Firewall
a part of a computer system or network that is designed to block unauthorized access while permitting outward communication.
fixed expense
a set cost that must be paid each budget period
Forgery
The fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another.
Formula Funding Grant
Non-competitive awards are usually allocated to eligible students
generic brand
are unbranded products that are plainly packaged, could have lower or standard quality, are sold at lower prices than branded products, and receive little or no promotion.
gift card
a card that is purchased for a certain amount and then used like cash, an activation fee may be added if not used by a specific time.
identity theft
A crime that involves someone pretending to be another person in order to steal money or obtain benefits
impulse buying
Buying on the spur of the moment, without planning
income
any form of money you receive, such as an allowance, a paycheck, and gains from an investment
insolvent
unable to pay debts
investment assets
Money which has been invested long-term which will provide future income
lay away
Process of paying for something little by little while the store keeps it
liability
a financial obligation that you currently owe or will owe in the future
liquid assets
cash and items that can be quickly converted to cash
lotteries
type of gambling in which people purchase tickets to try to win a prize
mediation
negotiation to resolve differences conducted by some impartial party
mobility
the quality or state of being able to move about freely
net worth
the difference between what you own and what you owe
net worth statement
a written record of your current financial situation
over-the-counter (OTC) stocks
penny stocks, risky, not offered on the exchanges
Parent Plus Loan
Borrowed and repaid by a parent on behalf of a dependent student
philanthropy
the act of giving money, goods, or services for the good of others
phishing
An attack that sends an email or displays a Web announcement that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information
Pitch
A brief speech that defines a person, process, product, service, organization, or event and its value
point-of-sale
a purchase by a debit card of a good or service at a retail store, a restaurant, or elsewhere
ponzi scheme
A type of fraud that occurs when the deposits of new investors are used to pay returns on the deposits of previous investors with no real investment happening
pyramid schemes
an illicit business model where profits are based on the investor's ability to recruit other individuals who are enrolled to make payments to their recruiters. Generally, neither a product or service is delivered.
record keeping
the process of setting up and maintaining an organized system for your financial affairs
Shoulder Surfing
Gaining compromising information through observation (as in looking over someone's shoulder).
Skimming
An electronic method of stealing a victim's credit card numbers and then using the information to make fraudulent purchases
small claims court
a court that deals with legal disputes that involve amounts below a certain limit
spam
unwanted e-mail (usually of a commercial nature sent out in bulk)
Startup
A newly established business in which the owner has taken on risk
Subsidized Student Loan
a loan on which interest is not charged until the student graduates
sweepstakes
It's a sales promotion device in which the participant competes for prizes by simply entering his or her name
Unsubsidized Student Loan
a loan that starts charging interest from the time the loan is made
UPC (universal product code)
is a system to identify uniquely the thousands of different suppliers and millions of different products that are warehoused, sold, delivered and billed throughout retail...also called a bar code
variable expense
a cost that changes both in the amount and time it must be paid
wealth
refers to an abundance of assets that are accumulated over time
settling a dispute by agreeing to accept the decision of an impartial outsider
assisted living facility
residence complex that provides personal and medical services for the elderly
bait and switch
A store advertises bargains that do not really exist to lure customers in, in hopes that they will buy more expensive merchandise.
budget
is a spending plan for the use of money over timed based on goals and expected income
capitalization
the total amount of stocks and bonds issued by a corporation
cash flow statement
a summary of the amount of money received as well as the amount paid out for goods and services during a specific period
cash inflow
income from your job, investments, and other sources
cash outflow
amounts spent for food, clothing, transportation, and other living costs (for personal use...can also mean money spent on running a business)
check cashing store
a non-bank institution that provides check-cashing services for consumers who don't have a bank account; fees are usually relatively high
civil suit
when one sues another (or corporation) for violation of their rights
class action suit
A case brought by someone to help him or her and all others who are similarly situated
collectibles
items of personal interest to collectors that can increase in value in the future but may also may lose value...risky
commercial property
land and buildings that produce rental income
Competitive Funding Grant
Funding is based on the merits of the application, and recipients are not pre-determined.
Continuation funding grant
Offers current award recipients the option of renewing grants for the following year
convertible bonds
bonds that can be converted into common stock at the bondholder's option
cooperative
a business organization owned and operated by a group of individuals for their mutual benefit
Cost Of Living
The average cost of basic necessities, such as housing and food
demographics
the statistical characteristics of the population
discretionary expense
cover items and services that are not necessary for maintaining your home or life
Dumpster Diving
Going into a trash can for documents that can be used for identity theft
expense
is the cost of goods and services you buy
extended warranty
additional coverage that you can buy to pay for repairs or replacements needed beyond the original warranty period
family crisis
a major problem that impacts the future of the family and its lifestyle
family life cycle
refers to the stages a family passes through from formation to aging
financial literacy
the understanding of the basic knowledge and skills needed to manage financial resources
fine print
A part of an agreement spelling out restrictions or limitations often in small type or obscure language.
Firewall
a part of a computer system or network that is designed to block unauthorized access while permitting outward communication.
fixed expense
a set cost that must be paid each budget period
Forgery
The fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another.
Formula Funding Grant
Non-competitive awards are usually allocated to eligible students
generic brand
are unbranded products that are plainly packaged, could have lower or standard quality, are sold at lower prices than branded products, and receive little or no promotion.
gift card
a card that is purchased for a certain amount and then used like cash, an activation fee may be added if not used by a specific time.
identity theft
A crime that involves someone pretending to be another person in order to steal money or obtain benefits
impulse buying
Buying on the spur of the moment, without planning
income
any form of money you receive, such as an allowance, a paycheck, and gains from an investment
insolvent
unable to pay debts
investment assets
Money which has been invested long-term which will provide future income
lay away
Process of paying for something little by little while the store keeps it
liability
a financial obligation that you currently owe or will owe in the future
liquid assets
cash and items that can be quickly converted to cash
lotteries
type of gambling in which people purchase tickets to try to win a prize
mediation
negotiation to resolve differences conducted by some impartial party
mobility
the quality or state of being able to move about freely
net worth
the difference between what you own and what you owe
net worth statement
a written record of your current financial situation
over-the-counter (OTC) stocks
penny stocks, risky, not offered on the exchanges
Parent Plus Loan
Borrowed and repaid by a parent on behalf of a dependent student
philanthropy
the act of giving money, goods, or services for the good of others
phishing
An attack that sends an email or displays a Web announcement that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information
Pitch
A brief speech that defines a person, process, product, service, organization, or event and its value
point-of-sale
a purchase by a debit card of a good or service at a retail store, a restaurant, or elsewhere
ponzi scheme
A type of fraud that occurs when the deposits of new investors are used to pay returns on the deposits of previous investors with no real investment happening
pyramid schemes
an illicit business model where profits are based on the investor's ability to recruit other individuals who are enrolled to make payments to their recruiters. Generally, neither a product or service is delivered.
record keeping
the process of setting up and maintaining an organized system for your financial affairs
Shoulder Surfing
Gaining compromising information through observation (as in looking over someone's shoulder).
Skimming
An electronic method of stealing a victim's credit card numbers and then using the information to make fraudulent purchases
small claims court
a court that deals with legal disputes that involve amounts below a certain limit
spam
unwanted e-mail (usually of a commercial nature sent out in bulk)
Startup
A newly established business in which the owner has taken on risk
Subsidized Student Loan
a loan on which interest is not charged until the student graduates
sweepstakes
It's a sales promotion device in which the participant competes for prizes by simply entering his or her name
Unsubsidized Student Loan
a loan that starts charging interest from the time the loan is made
UPC (universal product code)
is a system to identify uniquely the thousands of different suppliers and millions of different products that are warehoused, sold, delivered and billed throughout retail...also called a bar code
variable expense
a cost that changes both in the amount and time it must be paid
wealth
refers to an abundance of assets that are accumulated over time
Retirement and Estate Planning
401k
A form of retirement fund that an employee contributes to directly through a deduction from their paycheck, could be matched my employer
annuities
retirement plan set up with an insurance company, usually has a guaranteed minimum interest rate with market rates dictating the maximum
beneficiaries
the people who will receive assets upon the death of another
bonds
a debt security, a more secure investment than stocks especially when the bond issuer is a Federal or State government...still has risks
dividend stocks
stocks that pay investors a part of the company's profit, another name would be income stocks
domestic partner property
property co-owned by a married couple
estate
the assets and liabilities a person leaves when he or she dies
executor
a person assigned to carry out the terms of a will
free will
without undue influence or duress from others
general gift
is a share of the property that remains after specific gifts are made
growth stocks
stocks that will grow in value over the years adding to the total net worth of each share
guardian
a person placed in charge of beneficiaries who are under age, may also manage the estate for minors
intestate
without a will, state law will determine how property will be divided
IRA (Individual Retirement Account)
a personal retirement investment plan with tax benefits
joint tenancy
that two co-owners hold identical interests in the property at the same time
living will
is a health care directive that outlines specific medical treatment and care when a person becomes unable to make those decisions themselves
net worth
Assets minus liabilities
notary
someone legally empowered to witness signatures and certify a document's validity and to take depositions
"of sound mind"
a person is capable of making decisions
Pay-on-Death Bank Account
a bank account that has a designated beneficiary upon death, that person will generally become the owner of the account after the passing of the depositor.
pension plan
contractual agreement between an employer and its employees for the employer to provide benefits to employees after they retire.
power of attorney
a legal document giving a person the right to act on behalf of another including signing documents and making decisions concerning personal and financial matters
probate court
a state court of limited jurisdiction that conducts proceedings relating to the settlement of a deceased person's estate.
retirement
quitting your main job to pursue hobbies or other activities a person was unable to do while working
Roth IRA
retirement plan that taxes contribution but does not tax withdrawals
secured debts
debts that allow the lender to take possession of a specific piece of property if the debt is not repaid
Social Security
Figured over a lifetime of work
specific gift
leaves a particular object or dollar amount to a particular person
testamentary trust
is created when you die, and is used to hold property for someone else's benefit like leaving money to a minor until they are 21
Traditional IRA
tax deferred retirement plan, money is placed in the account before being taxed, money withdrawn will be taxed
trustee
a person or institution assigned to look after a person's estate after their death
trust fund
legal arrangement to place assets in a special account
vesting
A guarantee of accrued benefits to participants at retirement age, regardless of their employment status at that time
will
legal document stating a person's wishes for his or her estate after death
witness
a person that can verify the authenticity of a will
A form of retirement fund that an employee contributes to directly through a deduction from their paycheck, could be matched my employer
annuities
retirement plan set up with an insurance company, usually has a guaranteed minimum interest rate with market rates dictating the maximum
beneficiaries
the people who will receive assets upon the death of another
bonds
a debt security, a more secure investment than stocks especially when the bond issuer is a Federal or State government...still has risks
dividend stocks
stocks that pay investors a part of the company's profit, another name would be income stocks
domestic partner property
property co-owned by a married couple
estate
the assets and liabilities a person leaves when he or she dies
executor
a person assigned to carry out the terms of a will
free will
without undue influence or duress from others
general gift
is a share of the property that remains after specific gifts are made
growth stocks
stocks that will grow in value over the years adding to the total net worth of each share
guardian
a person placed in charge of beneficiaries who are under age, may also manage the estate for minors
intestate
without a will, state law will determine how property will be divided
IRA (Individual Retirement Account)
a personal retirement investment plan with tax benefits
joint tenancy
that two co-owners hold identical interests in the property at the same time
living will
is a health care directive that outlines specific medical treatment and care when a person becomes unable to make those decisions themselves
net worth
Assets minus liabilities
notary
someone legally empowered to witness signatures and certify a document's validity and to take depositions
"of sound mind"
a person is capable of making decisions
Pay-on-Death Bank Account
a bank account that has a designated beneficiary upon death, that person will generally become the owner of the account after the passing of the depositor.
pension plan
contractual agreement between an employer and its employees for the employer to provide benefits to employees after they retire.
power of attorney
a legal document giving a person the right to act on behalf of another including signing documents and making decisions concerning personal and financial matters
probate court
a state court of limited jurisdiction that conducts proceedings relating to the settlement of a deceased person's estate.
retirement
quitting your main job to pursue hobbies or other activities a person was unable to do while working
Roth IRA
retirement plan that taxes contribution but does not tax withdrawals
secured debts
debts that allow the lender to take possession of a specific piece of property if the debt is not repaid
Social Security
Figured over a lifetime of work
specific gift
leaves a particular object or dollar amount to a particular person
testamentary trust
is created when you die, and is used to hold property for someone else's benefit like leaving money to a minor until they are 21
Traditional IRA
tax deferred retirement plan, money is placed in the account before being taxed, money withdrawn will be taxed
trustee
a person or institution assigned to look after a person's estate after their death
trust fund
legal arrangement to place assets in a special account
vesting
A guarantee of accrued benefits to participants at retirement age, regardless of their employment status at that time
will
legal document stating a person's wishes for his or her estate after death
witness
a person that can verify the authenticity of a will
College Planning
529 Plan
A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs
College Choice
location, class offerings, size, 2-year or 4-year, tuition (cost), living expense
College Credit
Each course has a certain number attached to it, which you earn when you pass the course. Each college requires students to earn a specific number to graduate.
College Major
the program of study that you are following in a college to complete a specific degree
College Minor
A second field of study, not as many credits are earned as the major field (usually 18-21 credits)
Division 1 college
bigger schools that allow scolarships...UVa, Va Tech
Division 2 college
medium size schools that allow scolarships...Concord
Division 3 school
smaller schools, no scolarships...Bridgewater
FAFSA
Free Application for Federal Student Aid; determines how much financial aid a student may receive.
Financial Aid Package
The total amount of financial aid (federal and nonfederal) a student is offered by a college or career school.
Grants
A sum of money given by a certain organization, alumni, business to help students attend that college...does not have to be paid back
Loan Forgiveness
a program in which a borrower's loans are paid off
in exchange for paid work under conditions (duration, location, job description, etc) set by the institution that sponsored the loan
Private Loan
A loan issued by a bank, a credit union, a school, or a private agency where interest starts immediately after obtaining
Room and Board
cost of housing and food while attending college or career school, sometimes includes utilities
Scholarships
Financial aid that is awarded by merit, financial need, or excellence in a variety of skills, academic or athletic. These funds do not have to be paid back.
Subsidized Government Loan
A need-based loan from the federal government, the interest does not accrue until after the student is out of school
Tuition
a sum of money charged for teaching or instruction by a school, college, or university...cost of credits
Unsubsidized Government Loan
A government loan for which the borrower is fully responsible for paying the interest regardless of the loan status.
Work-Study
A program that allows students to work part time while continuing their studies
A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs
College Choice
location, class offerings, size, 2-year or 4-year, tuition (cost), living expense
College Credit
Each course has a certain number attached to it, which you earn when you pass the course. Each college requires students to earn a specific number to graduate.
College Major
the program of study that you are following in a college to complete a specific degree
College Minor
A second field of study, not as many credits are earned as the major field (usually 18-21 credits)
Division 1 college
bigger schools that allow scolarships...UVa, Va Tech
Division 2 college
medium size schools that allow scolarships...Concord
Division 3 school
smaller schools, no scolarships...Bridgewater
FAFSA
Free Application for Federal Student Aid; determines how much financial aid a student may receive.
Financial Aid Package
The total amount of financial aid (federal and nonfederal) a student is offered by a college or career school.
Grants
A sum of money given by a certain organization, alumni, business to help students attend that college...does not have to be paid back
Loan Forgiveness
a program in which a borrower's loans are paid off
in exchange for paid work under conditions (duration, location, job description, etc) set by the institution that sponsored the loan
Private Loan
A loan issued by a bank, a credit union, a school, or a private agency where interest starts immediately after obtaining
Room and Board
cost of housing and food while attending college or career school, sometimes includes utilities
Scholarships
Financial aid that is awarded by merit, financial need, or excellence in a variety of skills, academic or athletic. These funds do not have to be paid back.
Subsidized Government Loan
A need-based loan from the federal government, the interest does not accrue until after the student is out of school
Tuition
a sum of money charged for teaching or instruction by a school, college, or university...cost of credits
Unsubsidized Government Loan
A government loan for which the borrower is fully responsible for paying the interest regardless of the loan status.
Work-Study
A program that allows students to work part time while continuing their studies
Review Terms
fiat money
Money by government decree; has no alternative value or use as a commodity.
windfall income
any type of additional income over expenses that is completely unexpected
earned income
Money received for work performed; may include salary, wages, tips, professional fees, commissions, etc.
unearned income
Income derived from investments and other sources not related to employment services. Examples of unearned income include interest from a savings account, bond interest, and dividends from stock, rental properties, etc.
stock broker
need to pass a certification test
gross income
the total amount of income from wages before any payroll deductions
net income
take home pay, money made after expenses
allowances
also known as exemptions; W-4 Form is filled out and given to employer stating number of allowances
discretionary income
Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter
Rule 72
a formula designed to help people estimate how long it will take to double their money at a certain expected interest rate
time value of money
A concept that money available now is worth more than the same amount in the future because of its potential earning capacity
liquidity
A measure of the ease with which an asset can be converted into money without a significant loss of value.
collateralize loan
a loan backed by an asset
open end credit
Revolving credit
debt to credit ratio
A measure of the total balance on your credit cards and other loans divided or compared to to your total credit limit.
grace period
A time period during which no finance charges will be added to your account
finance charge
The cost of credit including interest, service and/or transaction fees.
FICO
A credit rating developed by Fair Isaac & Company in the late 1950s, now widely used by lenders and employers. It consists of digit numbers ranging from 300-850. It measures a person creditworthiness.
HMO
Health Maintenance Organization...
A type of managed care where no claims are submitted, must use the physicians and facilities, the physician are paid on a per head basis rather than for actual treatment provided.
financial advisor
A professional who provides financial planning and advice on financial matters.
ETF
Exchange Traded Fund...
A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
primary market
A new-issues market where investors buy securities initially offered for sale, and the money goes to the issuer
secondary market
market for reselling financial assets
mutual funds
A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors.
tax refund loans
a loan that is offered to people against their income tax return
traditional IRA
Individual Retirement Account - A personal qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount each year, depending on the person's tax bracket.
Roth IRA
Account providing tax-free income growth; contributions are made with after-tax dollars.
529 Savings
A tax-deferred college savings plan run by states and set up with mutual fund companies
speculator
person who risks money in order to make a large profit
promissory note
A signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand
layaway
A sales method that keeps merchandise in storage until the customer finishes paying for it.
fringe benefits
Any financial extras beyond the regular pay check, such as health insurance, life insurance, paid vacation and/or retirement
long term goal
A general realistic statement of what one hopes to attain utimately. Ex. Obtaining your degree in the next 5 years
principal
Amount originally borrowed in a loan
line of credit
A pre-established amount that can be borrowed on demand with no collateral.reconcile
reconcile
To bring a bank statement and your own record of transactions into agreementChapter 7
Chapter 7 bankruptcy
A chapter of the Bankruptcy Code that provides for liquidation (sell for cash) of the debtor's assets in order to repay the creditors. Certain assets or aggregate value of assets of the debtor may be exempt (they don't have to sell) based on state law.
Chapter 13 bankruptcy
a reorganization form of bankruptcy for individuals that allows the debtors to keep their property and use their income to pay a portion of their debts over three to five years
installment loans
fixed amount at the time of your application and approval. Repaid in fixed monthly payments over a specific period of time. Example- Auto loans and mortgages
liquidation
Closing down the operations of a business and selling its assets and operations to pay its debts and distribute any gains to stockholders.
home equity loan
a loan secured by equity value in the borrower's home
collision insurance
This covers the car of the insured person and pays for repairs after an accident or cash compensation if the car can't be repaired. This type of coverage is usually optional
comprehensive insurance
covers your car for reasons other than a collision, such as theft, fire, vandalism
premium
A periodic payment to the insurance company to keep the policy in force.
whole life insurance
Form of life insurance policy that offers protection in case the insured dies and also builds up cash surrender value at a guaranteed rate, which can be borrowed against. The policy stays in force for the lifetime of the insured, unless it is canceled or lapses.
Universal Variable Life Insurance
Type of the US life insurance which combines the benefits of an adjustable premium, adjustable coverage term life insurance, and a savings account
Better Business Bureau
A non-profit organization sponsored by local businesses to provide general information on companies. It maintains records on consumer inquiries and complaints and sometimes offers various consumer education programs.
down payment
a partial payment made at the time of purchase
phishing
An attack that sends an email or displays a Web announcement that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information
utilities
Items and services needed to make a house or apartment functional such as hot water, electricity, natural gas, phone service, and cable service.
Money by government decree; has no alternative value or use as a commodity.
windfall income
any type of additional income over expenses that is completely unexpected
earned income
Money received for work performed; may include salary, wages, tips, professional fees, commissions, etc.
unearned income
Income derived from investments and other sources not related to employment services. Examples of unearned income include interest from a savings account, bond interest, and dividends from stock, rental properties, etc.
stock broker
need to pass a certification test
gross income
the total amount of income from wages before any payroll deductions
net income
take home pay, money made after expenses
allowances
also known as exemptions; W-4 Form is filled out and given to employer stating number of allowances
discretionary income
Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter
Rule 72
a formula designed to help people estimate how long it will take to double their money at a certain expected interest rate
time value of money
A concept that money available now is worth more than the same amount in the future because of its potential earning capacity
liquidity
A measure of the ease with which an asset can be converted into money without a significant loss of value.
collateralize loan
a loan backed by an asset
open end credit
Revolving credit
debt to credit ratio
A measure of the total balance on your credit cards and other loans divided or compared to to your total credit limit.
grace period
A time period during which no finance charges will be added to your account
finance charge
The cost of credit including interest, service and/or transaction fees.
FICO
A credit rating developed by Fair Isaac & Company in the late 1950s, now widely used by lenders and employers. It consists of digit numbers ranging from 300-850. It measures a person creditworthiness.
HMO
Health Maintenance Organization...
A type of managed care where no claims are submitted, must use the physicians and facilities, the physician are paid on a per head basis rather than for actual treatment provided.
financial advisor
A professional who provides financial planning and advice on financial matters.
ETF
Exchange Traded Fund...
A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
primary market
A new-issues market where investors buy securities initially offered for sale, and the money goes to the issuer
secondary market
market for reselling financial assets
mutual funds
A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors.
tax refund loans
a loan that is offered to people against their income tax return
traditional IRA
Individual Retirement Account - A personal qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount each year, depending on the person's tax bracket.
Roth IRA
Account providing tax-free income growth; contributions are made with after-tax dollars.
529 Savings
A tax-deferred college savings plan run by states and set up with mutual fund companies
speculator
person who risks money in order to make a large profit
promissory note
A signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand
layaway
A sales method that keeps merchandise in storage until the customer finishes paying for it.
fringe benefits
Any financial extras beyond the regular pay check, such as health insurance, life insurance, paid vacation and/or retirement
long term goal
A general realistic statement of what one hopes to attain utimately. Ex. Obtaining your degree in the next 5 years
principal
Amount originally borrowed in a loan
line of credit
A pre-established amount that can be borrowed on demand with no collateral.reconcile
reconcile
To bring a bank statement and your own record of transactions into agreementChapter 7
Chapter 7 bankruptcy
A chapter of the Bankruptcy Code that provides for liquidation (sell for cash) of the debtor's assets in order to repay the creditors. Certain assets or aggregate value of assets of the debtor may be exempt (they don't have to sell) based on state law.
Chapter 13 bankruptcy
a reorganization form of bankruptcy for individuals that allows the debtors to keep their property and use their income to pay a portion of their debts over three to five years
installment loans
fixed amount at the time of your application and approval. Repaid in fixed monthly payments over a specific period of time. Example- Auto loans and mortgages
liquidation
Closing down the operations of a business and selling its assets and operations to pay its debts and distribute any gains to stockholders.
home equity loan
a loan secured by equity value in the borrower's home
collision insurance
This covers the car of the insured person and pays for repairs after an accident or cash compensation if the car can't be repaired. This type of coverage is usually optional
comprehensive insurance
covers your car for reasons other than a collision, such as theft, fire, vandalism
premium
A periodic payment to the insurance company to keep the policy in force.
whole life insurance
Form of life insurance policy that offers protection in case the insured dies and also builds up cash surrender value at a guaranteed rate, which can be borrowed against. The policy stays in force for the lifetime of the insured, unless it is canceled or lapses.
Universal Variable Life Insurance
Type of the US life insurance which combines the benefits of an adjustable premium, adjustable coverage term life insurance, and a savings account
Better Business Bureau
A non-profit organization sponsored by local businesses to provide general information on companies. It maintains records on consumer inquiries and complaints and sometimes offers various consumer education programs.
down payment
a partial payment made at the time of purchase
phishing
An attack that sends an email or displays a Web announcement that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information
utilities
Items and services needed to make a house or apartment functional such as hot water, electricity, natural gas, phone service, and cable service.
Economic Review
Action Phase
Getting a plan going...determination and flexibility
Anti-Trust Laws
promotes competition and fair trade, and prevents companies from dominating an industry
Assets
things that you own that have value such as stocks, bonds, saving accounts, cars, appliances, computers, etc
Balance of payments
the difference between total imports and total exports of goods and service
Business cycle
flucuation between periods of economic growth & slowdown
Capital
money used to generate income or to invest in a business or asset
Cartel
a group of countries or firms that control the production and pricing of a product or service
Collusion
the companies in an oligopoly are not allowed to make secret aggreement among themselves
Command Economy
a system in which a central authority, usually the government, controls economic activities
Comparative advantage
is the benefit to the party that has the lower opportunity cost in pursuing a given course of action
Conflict of Interest
sellers want higher prices, consumer wants lower prices...seller wants to maintain lower wages, workers want to have higher wages...also can mean a person's business conflicts with his duty
Consumer
buyer and user of goods and services
Consumer price index (CPI)
it is a measure of the average change in prices over time for selcted goods and services
Cost-Benefit Principle
Weighing the amount paid compared to the advances
Deficit spending
the amount the federal government spends each year beyond the amount it receives in revenue
Demand
the quantity of a product or service consumers are willing to buy
Depression
when a recession goes on for several years
Discount Rate
interest rate the Federal Reserve charges banks to borrow government money
Dividends
money (profits) paid to a stock holder for owning the company stock
Dumping
Selling goods in another country below market prices
Durable goods
cars, appliances, computers
Economic globalization
the flow of goods, services, labor, money, innovative ideas , and technology across borders
Economic System
the structure in which resources are turned into goods and services to address unlimited needs and wants
Economies of scale
the cost of producing one unit of something declines as the number of units produced rises
Ethics
Moral principles or beliefs that directs a person's action
European Union (EU)
the largest trade sector in the world surpassing any individual country
Evaluation Stage
Ongoing reflection on how well things went
Exchange rate
the value of one currency compared to another
Exports
the goods and services grown or made in
FDA
Food and Drug Administration
Federal Reserve System (Feds)
Regulates the nation's money supply and banking system
Federal Trade Commission
Promotes free and fair trade competition by preventing deceptive practices, false advertising, and unfair trade practices
Fiscal Policy
The governments taxing and spending decisions. To stimulate the economy, the government spends more and lowers taxes
Free Enterprise System
capitalism
Free trade
a policy of limited government trade restrictions
Goals
An objective you want to obtain
Goods
physical items such as food and clothing
Gross domestic product (GDP)
measures the value of all goods and services produced by a nation during a specified period
Human Resources
qualities and characteristics that people have within themselves
hyperinflation
rapid, excessive, and out of control price increases
Imports
the goods and services that come into a country from other countries
Income tax
a tax on the earnings of individuals and corporations
Inflation
an overall increase in the price of goods and services
Innovation
Produces new ideas that can increase profits and make a better product
International trade
the buying and selling of goods and services across national borders
Inversion
relocation of a corporation's headquarters to a lower-tax nation through mergers and acquisitions
Investment
is an asset you buy that increases your wealth over time, but carries the risk of loss
Jobless Claims
when unemployed workers request assistance
Labor Force
composed of people, age 16 and over, who are employed or looking for and able to work
Labor productivity
the value of the goods and services a worker creates in a given time
Labor Union
a group of workers who are covered by collective bargaining aggreements
Liquid Assets
cash, savings accounts, money market accounts, checking accounts...
Market economy
a system in which privately owned businesses operate and compete for profits with limited government regulations
Marketplace
not a physical place like a mall or a grocery store but an arena in which consumers and producers meet to exchange goods, services, and money
Migrants
people who move from one place or country to another
Mixed Economy
a combination of the market and the command systems
Monetary Policy
actions the federal reserve board takes to change the supply of money and credit
Monopoly
a single seller or producer of a given product or service
Multinational corporation
a business that operates in more than one country
National Debt
the total amount of money the government owes at a given time
Needs
items a person must have to survive
Nonhuman Resources
external resources, such as money, time, equipment, and possessions
Offshore outsourcing
moving sections of a business to another country
Oligopoly
occurs when a few large companies dominate an industry
OPEC
Organization of Petroleum Exporting Countries
Open Market Operations
The Feds buying and selling Treasury securities in the market place
Opportunity Cost
the value of the best option or alternative given up
Outsourcing
when companies move sections of their business to other companies or to their own subsidiaries
Perfect competition
competition between producers results in greater innovation, better service, and lower prices for consumers
Planning Phase
Beginning a plan of action, first stage...organization
Priority
A goal or value that is given more importance than others
Producer
an individual or business that provides the supply of goods and services to meet consumer demands
Profit
the total amount of money earned after expenses are subtracted from income
Property tax
a tax that is paid on real estate owned by individuals and corporations
Prosperity
periods of growth and financial well-being
Recession
an extended period of slow or no economic growth
Reserve Requirements
the amount of cash that banks and other financial institutions must set aside rather than lend to customers
Resources
refers to any input used to generate other goods or services
Sales tax
tax added to the price of goods and services you buy
Scarcity
the challenge of stretching resources to cover needs and wants
Securities
stocks, bonds, and other investment opportunities
Securities and Exchange Commission (SEC)
Protects against fraud and enforces fair and full disclosure of financial data about securities
Services
work performed
Specialization
a trade of goods or services that it cannot produce
Stagflation
a period of slow growth and high inflation
Standard of living
the overall level of comfort of a person, household, or population as measured by the amount of goods and services consumed
Supply
the amount of a product or service producers are willing to provide
Tax
a fee imposed by government on income, products, or activities, and paid by citizens and businessess
Technology
the application of scientific knowledge to uses and products development
Trade barrier
any actions taken to control or limit imports
Trade deficit
when a country buys, or imports, more products than it sells
Trade-off
an item given up in order to gain something else
Trade surplus
when a country sells, or exports more than it buys
Traditional economy
a system in which economic decisions are based on society's values, culture, and customs.
Underemployment
workers who are employed only part time or who are "over qualified" for their jobs
Unemployment rate
the percentage of the labor forces that is out of work who are "over qualified" for their jobs
U.S. Department of Treasury
manages the finances of the federal government by collecting taxes and paying the bills
Values
A person's beliefs
Wants
items a person would like to have
World Trade Organization (WTO)
an international organization that mediates trade disputes among 151 member nations and establishes trade practices that are acceptable and fair to all nations
Getting a plan going...determination and flexibility
Anti-Trust Laws
promotes competition and fair trade, and prevents companies from dominating an industry
Assets
things that you own that have value such as stocks, bonds, saving accounts, cars, appliances, computers, etc
Balance of payments
the difference between total imports and total exports of goods and service
Business cycle
flucuation between periods of economic growth & slowdown
Capital
money used to generate income or to invest in a business or asset
Cartel
a group of countries or firms that control the production and pricing of a product or service
Collusion
the companies in an oligopoly are not allowed to make secret aggreement among themselves
Command Economy
a system in which a central authority, usually the government, controls economic activities
Comparative advantage
is the benefit to the party that has the lower opportunity cost in pursuing a given course of action
Conflict of Interest
sellers want higher prices, consumer wants lower prices...seller wants to maintain lower wages, workers want to have higher wages...also can mean a person's business conflicts with his duty
Consumer
buyer and user of goods and services
Consumer price index (CPI)
it is a measure of the average change in prices over time for selcted goods and services
Cost-Benefit Principle
Weighing the amount paid compared to the advances
Deficit spending
the amount the federal government spends each year beyond the amount it receives in revenue
Demand
the quantity of a product or service consumers are willing to buy
Depression
when a recession goes on for several years
Discount Rate
interest rate the Federal Reserve charges banks to borrow government money
Dividends
money (profits) paid to a stock holder for owning the company stock
Dumping
Selling goods in another country below market prices
Durable goods
cars, appliances, computers
Economic globalization
the flow of goods, services, labor, money, innovative ideas , and technology across borders
Economic System
the structure in which resources are turned into goods and services to address unlimited needs and wants
Economies of scale
the cost of producing one unit of something declines as the number of units produced rises
Ethics
Moral principles or beliefs that directs a person's action
European Union (EU)
the largest trade sector in the world surpassing any individual country
Evaluation Stage
Ongoing reflection on how well things went
Exchange rate
the value of one currency compared to another
Exports
the goods and services grown or made in
FDA
Food and Drug Administration
Federal Reserve System (Feds)
Regulates the nation's money supply and banking system
Federal Trade Commission
Promotes free and fair trade competition by preventing deceptive practices, false advertising, and unfair trade practices
Fiscal Policy
The governments taxing and spending decisions. To stimulate the economy, the government spends more and lowers taxes
Free Enterprise System
capitalism
Free trade
a policy of limited government trade restrictions
Goals
An objective you want to obtain
Goods
physical items such as food and clothing
Gross domestic product (GDP)
measures the value of all goods and services produced by a nation during a specified period
Human Resources
qualities and characteristics that people have within themselves
hyperinflation
rapid, excessive, and out of control price increases
Imports
the goods and services that come into a country from other countries
Income tax
a tax on the earnings of individuals and corporations
Inflation
an overall increase in the price of goods and services
Innovation
Produces new ideas that can increase profits and make a better product
International trade
the buying and selling of goods and services across national borders
Inversion
relocation of a corporation's headquarters to a lower-tax nation through mergers and acquisitions
Investment
is an asset you buy that increases your wealth over time, but carries the risk of loss
Jobless Claims
when unemployed workers request assistance
Labor Force
composed of people, age 16 and over, who are employed or looking for and able to work
Labor productivity
the value of the goods and services a worker creates in a given time
Labor Union
a group of workers who are covered by collective bargaining aggreements
Liquid Assets
cash, savings accounts, money market accounts, checking accounts...
Market economy
a system in which privately owned businesses operate and compete for profits with limited government regulations
Marketplace
not a physical place like a mall or a grocery store but an arena in which consumers and producers meet to exchange goods, services, and money
Migrants
people who move from one place or country to another
Mixed Economy
a combination of the market and the command systems
Monetary Policy
actions the federal reserve board takes to change the supply of money and credit
Monopoly
a single seller or producer of a given product or service
Multinational corporation
a business that operates in more than one country
National Debt
the total amount of money the government owes at a given time
Needs
items a person must have to survive
Nonhuman Resources
external resources, such as money, time, equipment, and possessions
Offshore outsourcing
moving sections of a business to another country
Oligopoly
occurs when a few large companies dominate an industry
OPEC
Organization of Petroleum Exporting Countries
Open Market Operations
The Feds buying and selling Treasury securities in the market place
Opportunity Cost
the value of the best option or alternative given up
Outsourcing
when companies move sections of their business to other companies or to their own subsidiaries
Perfect competition
competition between producers results in greater innovation, better service, and lower prices for consumers
Planning Phase
Beginning a plan of action, first stage...organization
Priority
A goal or value that is given more importance than others
Producer
an individual or business that provides the supply of goods and services to meet consumer demands
Profit
the total amount of money earned after expenses are subtracted from income
Property tax
a tax that is paid on real estate owned by individuals and corporations
Prosperity
periods of growth and financial well-being
Recession
an extended period of slow or no economic growth
Reserve Requirements
the amount of cash that banks and other financial institutions must set aside rather than lend to customers
Resources
refers to any input used to generate other goods or services
Sales tax
tax added to the price of goods and services you buy
Scarcity
the challenge of stretching resources to cover needs and wants
Securities
stocks, bonds, and other investment opportunities
Securities and Exchange Commission (SEC)
Protects against fraud and enforces fair and full disclosure of financial data about securities
Services
work performed
Specialization
a trade of goods or services that it cannot produce
Stagflation
a period of slow growth and high inflation
Standard of living
the overall level of comfort of a person, household, or population as measured by the amount of goods and services consumed
Supply
the amount of a product or service producers are willing to provide
Tax
a fee imposed by government on income, products, or activities, and paid by citizens and businessess
Technology
the application of scientific knowledge to uses and products development
Trade barrier
any actions taken to control or limit imports
Trade deficit
when a country buys, or imports, more products than it sells
Trade-off
an item given up in order to gain something else
Trade surplus
when a country sells, or exports more than it buys
Traditional economy
a system in which economic decisions are based on society's values, culture, and customs.
Underemployment
workers who are employed only part time or who are "over qualified" for their jobs
Unemployment rate
the percentage of the labor forces that is out of work who are "over qualified" for their jobs
U.S. Department of Treasury
manages the finances of the federal government by collecting taxes and paying the bills
Values
A person's beliefs
Wants
items a person would like to have
World Trade Organization (WTO)
an international organization that mediates trade disputes among 151 member nations and establishes trade practices that are acceptable and fair to all nations