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26 Cards in this Set
- Front
- Back
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Annuity |
situation where there is equal cash flow occurring at equal intervals for a fixed period of time |
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Bonds |
A promissory not to repay a certain amount of money at some future point |
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Capital Gain |
Taxable income that occurs when an asset is sold for more than it originally cost |
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Compound interest |
interest earned on interest added to an account |
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Diversification |
process of investing multiple investments to minimize risks |
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Dividends |
distribution of cash to shareholders |
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Earned interest |
amount of money earned on interest bearing accounts or other investments |
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Equity |
ownership of something (business, account, home, car) |
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IRA individual retirement account |
type of savings account created by the gov to encourage people to save for retirement |
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inflation |
increased cost of living |
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interest |
price the borrower pays a creditor for the use of money over a period of time |
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investment |
something acquired with the goal of saving money |
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investment risk |
uncertainty of return of investment |
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market value |
current quoted price at which investors buy or sell a share of common stock or a bond at a given time |
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money market |
type of deposit account that has features of a checking and savings account |
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mutual fund |
sells share to investors in order to collect a pool of money that is then used to buy various investments |
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personal risk |
exposure to risk of loss |
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principal |
total amount of money originally invested or loaned |
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rate of return |
gain or loss on an investment over a specific period of time |
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rule of 72 |
amount of time it takes your money to double |
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simple interest |
interest earned only on the original amount |
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stock |
share of ownership in a company |
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stockholder |
individual that holds stock in a company |
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stock broker |
agent that charges fee for handling assets |
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time value of money |
money received today and how much it will be worth in the future |
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70/20/10 rule |
70% of income is spent 20% is saved and 10% is invested |
