wealth management key terms

consequence
having important effects or influence
oppurtunity cost
the best alternative forgone due to a decision being made
trade-off
an exchange that occurs as a compromise
decision making
the cognitive process of reaching a decision
resources
available means
scarcity
limited quantities of resources to meet unlimited wants
distribution
the commercial activity of transporting and selling goods from a producer to a consumer
wealth management
combination of financial/investment advice, accounting/tax services, and legal/estate planning
allocation
a share set aside for a specific purpose
property rights
the ability of an individual to own and exercise control over scarce resources
financial institution
an institution (public or private) that collects funds (from the public or other institutions) and invests them in financial assets
nonprofit organization
Institution that functions much like a business, but does not operate for the purpose of generating profits
cash
prompt payment for goods or services in currency or by check
credit
arrangement for deferred payment for goods and services
debit
an accounting entry acknowledging sums that are owing
EFT
Electronic Funds Transfer
incentives
advantages that help businesses, such as lower taxes, cheaper land, and employee training programs.
values
principles considered desirable
risk
a venture undertaken without regard to possible loss or injury
return
pay back
profit
the excess of revenues over outlays in a given period of time (including depreciation and other non-cash expenses)
interest
a fixed charge for borrowing money
self-interest
concern for ones own well being and advantages
saving
the activity of protecting something from loss or danger
investing
The act of committing money or capital to an endeavor (a business, project, real estate, etc.) with the expectation of obtaining an additional income or profit.
financial needs
financial goals
specific objectives to be accomplished through financial planning
good faith
having honest intentions
disclosure
something that is made open or revealed
float
the number of shares outstanding and available for trading by the public
time value of money
increase of an amount of money as a result of interest or dividends earned
inflation
a general and progressive increase in prices
interest rate
the percentage of a sum of money charged for its use
present value
the amount of money you would need to deposit now in order to attain a desired amount in the future
compound interest
interest calculated on both the principal and the accrued interest
wage
money paid to a worker
salary
something that remunerates
rent
a regular payment by a tenant to a landlord for use of some property
dividends
profits paid to investors
transfer payment
a public expenditure (as for unemployment compensation or veteran’s benefits) that is not for goods and services
on-boarding
Programs aimed at helping employees integrate, assimilate, and transition to new jobs
W-4
The withholding form each new employee fills out, stating the number of exemptions. the more exemptions listed, the less withholding tax will be taken from the paycheck.
personal allowances
The money(usually a set amount) given to an individual to spend
exemption
an act exempting someone
I-9
pay period
The period covered by a salary payment
gross income
Income before taxes
net income
the excess of revenues over outlays in a given period of time (including depreciation and other non-cash expenses)
deduction
an amount or percentage deducted
pension
a regular payment to a person that iis intended to allow them to subsist without working
401(k)
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
FICA
Short for Federal Insurance Contributions Act, the name given on the paycheck stub for Social Security and Medicare taxes. The employee pays some of the FICA tax, and and the employer pays some of this tax for each employee. Social Security pays benifits for older people, people with disabilaties, and minor children and surviving spouses of deceased workers. Medicare pays for hospital insurance for those over 65.
asset
a useful or valuable quality
liability
the state of being legally obliged and responsible
net worth
total assets minus total liabilities
personal budget
a specific plan for spending your income
income
the financial gain (earned or unearned) accruing over a given period of time
expenses
the costs of operating a business
maintain
keep in safety and protect from harm, decay, loss, or destruction
checkbook register
a record of checks written and deposits made in a checking account, kept by the depositor
savings register
Place to create a savings account.
deposit
a payment given as a guarantee that an obligation will be met
withdrawal
the act of taking out money or other capital
reconcile
bring into consonance or accord
bank statement
a periodic statement prepared by a bank for each client
transaction
a business activity that changes assets, liabilities, or owner’s equity
transaction fee
an extra charge for various credit activities such as using an ATM or receiving a cash advance
balance
compute credits and debits of an account
overdraft protection
an automatic loan made to you if you write a check for more money than you have in your account
credit
an accounting entry acknowledging income or capital items
APR
this stands for annual percentage rate, which is a number calculated by taking into account the total cost of the loan, including what the borrower will pay in interest; this makes it easier to compare different loan offers
annual fee
An amount that credit card companies can charge for the use of a credit card.
late fee
a penalty for making a payment after the due date
loan
the temporary provision of money (usually at interest)
installment loan
a loan repaid with interest in equal periodic payments
line of credit
the maximum credit that a customer is allowed
secured loan
a loan backed by something valuable, such as property
unsecured loan
A loan made on the signature and credit of the borrower, not secured by collateral. Credit card. (Debenture)
fixed-rate loan
adjustable-rate loan
interest-only loan
mortgage
a conditional conveyance of property as security for the repayment of a loan
lien
the right to take another’s property if an obligation is not discharged
direct car loan
Loan where the lender goes through the borrower
indirect car loan
Loan deal in which the actual lender may not be known to the borrower.
payday loan
A loan where a borrower gets a cash advanced based on his paycheck. These loans generally must be repaid on the next payday.
usury
the act of lending money at an exorbitant rate of interest
predatory lending
Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.
loan shark
someone who lends money at excessive rates of interest
billing statement
your periodic credit card bill, which describes and summarizes all the outstanding balances, purchases, payments, credits, finance charges and other transactions for the month
tax liability
the amount of tax owed
adjusted gross income
your gross income after certain reductions have been made.
1040 EZ tax form
Simplified IRS tax form which some individuals can file instead of the 1040 form.
1040 tax form
The standard IRS form for individual tax returns.
taxable income
income on which tax must be paid; total income minus exemptions and deductions
exemptions
immunity from a general burden, tax or charge; in bankruptcy or judgment executions, that portion of the debtor’s property that cannot be liquidiated and applied to her debts
deductions
variable amounts that you can subtract, or deduct, from your gross income
indentity theft
When someone uses your name, Social Security number, credit card number, and other personal information without your permission
phishing
a technique to gain personal information for the purpose of identity theft, usually by means of fraudulent e-mail
insolvent
unable to meet or discharge financial obligations
total debt
the sum of all bonds issued by the municipality and subtracts self-supporting debt from the figure
total assets
The sum of current, fixed and intangible assets, which represents everything of value that is owned by the company
bankruptcy
inability to discharge all your debts as they come due
debt consolidation
act of combinging all debts into one monthly payment, typically extending the terms and the length of time required to repay the debt
secured debt
Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans and tax liens.
unsecured debt
A debt not backed by specific property to satisfy the indebtedness in case of default.
forbearance
a delay in enforcing rights or claims or privileges
foreclosure
the legal proceedings initiated by a creditor to repossess the collateral for loan that is in default
insurance
protection against future loss
premium
payment or reward (especially from a government) for acts such as catching criminals or killing predatory animals or enlisting in the military
deductible
a clause in an insurance policy that relieves the insurer of responsibility to pay the initial loss up to a stated amount
coverage
the protection provided by the terms of an insurance policy
liability
the state of being legally obliged and responsible
estate planning
preparing a plan for transferring property during one’s lifetime and at one’s death
beneficiary
the recipient of funds or other benefits
living trust
a trust created and operating during the grantor’s lifetime
probate
a judicial certificate saying that a will is genuine and conferring on the executors the power to administer the estate
will
a legal document declaring a person’s wishes regarding the disposal of their property when they die
executor
a person appointed by a testator to carry out the terms of the will
savings accounts
Hold money not spent on consumption.
money market accounts
Savings account that pays market rate or better interest and allows access to funds without penalty.
certificates of deposit
Time deposits that state the amount of the deposit, maturity, and rate of intrest being paid
bonds
a certificate issued by a government or private company which promises to pay back with interest the money borrowed from the buyer of the certificate: The city issued bonds to raise money for putting in new sewers.
lending investments
receiving money for loaning money
stocks
Shares of ownership in a corporation.
mutual funds
financial organization that pools people’s money and invests it
collectibles
items that are relatively rare in number
ownership investments
making money for owning something
securities
All of the investments, including stocks, bonds, mutual funds, options, and commodities, that are traded.
interest rate/coupon rate
the percentage of a sum of money charged for its use
face value
the value of a security that is set by the company issuing it
maturity date
the date on which a financial obligation must be repaid
issuer
an institution that issues something (securities or publications or currency etc.)
yield
production of a certain amount
bond rating
an evaluation by a rating company of the probability that a particular bond issue will default
zero-coupon bond
common stock
stock other than preferred stock
perferred stock
Shares which pay fixed dividends and have precedence over common stock.
stock exchanges
business organizations that accommodate the buying and selling of securities.
shares outstanding
the shares available to sell/buy
market capitalization
an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share
mutual funds
financial organization that pools people’s money and invests it
index fund
a mutual fund that invests in the stocks that are the basis of a well-known stock or bond index
exchange traded funds
tracks specified market index, no capital gains or dividend distribution
retirement planning
By planning ahead you can ensure financial stability during your retirement.
asset allocation
The distribution of investment funds among broad classes of assets.
vesting
the point at which you become eligible to recieve the employer’s pension plan contributions that you’ve gained, even if you leave the company before retiring.
annual report
a yearly statement of the financial condition, progress, and expectations of an organization
SEC filings
A document, usually containing financial data, that a company delivers to the SEC and, thereby, to the public.
EDGAR
Electronic Data Gathering Analysis and Retrieval, the electronic system used by the SEC to enable investors to search electronically for financial reports filed by individual companies
financial statements
Financial reports that summarize the financial condition and operations of a business
balance sheets
accounting statements that provide a snapshot of a company’s financial position at a particular time
income statement
a financial statement that gives operating results for a specific period
statement of cash flow
a financial statement that shows a company’s incoming and outgoing money during a time period (often monthly or quarterly)
stockholder’s equity
The amount accruing to the corporations owners
stock table
can be found in a newspaper and shows information about popular stocks.
stock symbol
the letters used to identify listed companies on the securities exchanges where they are traded