Vocabulary

• Personal Finance – The management of individual or family monetary resources, including budgeting, saving, investments, and spending.
• Global Economics – The study of economic activity on a global scale, considering the interconnectedness of national economies and the impact of global factors.
• Budgeting – The process of creating a plan to spend money, often set on a monthly basis.
• Saving – Putting money aside, typically in a bank or investment account, for future use.
• Investment – The action or process of allocating money with the expectation of receiving a profit or material result in the future.
• Spending – The act of using money to buy goods or services.
• Credit – Borrowed money that can be used to purchase goods and services when needed.
• Debt – Money that is owed or due.
• Interest Rate – The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
• Inflation – The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
• Deflation – The decrease in the general price level of goods and services, often resulting in increased purchasing power.
• Exchange Rate – The value of one currency for the purpose of conversion to another.
• Gross Domestic Product (GDP) – The total market value of all final goods and services produced in a country in a given year.
• Unemployment Rate – The percentage of the total labor force that is jobless and actively seeking employment.
• Income – Money received, especially on a regular basis, for work or through investments.
• Taxation – The means by which governments finance their expenditure by imposing charges on citizens and corporate entities.
• Stock Market – A public market for the trading of company stock and derivatives at an agreed price.
• Bonds – A debt security, similar to an IOU, where the issuer owes the holders a debt and is obliged to pay them interest or to repay the principal at a later date.
• Mutual Funds – An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.
• Retirement – The action or fact of leaving one's job and ceasing to work.
• Pension – A regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.
• Insurance – A contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
• Real Estate – Property consisting of land or buildings.
• Mortgage – A loan to finance the purchase of real estate, usually with specified payment periods and interest rates.
• Diversification – The process of allocating capital in a way that reduces the exposure to any one particular asset or risk.
• Risk Tolerance – The degree of variability in investment returns that an individual is willing to withstand.
• Asset Allocation – An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon.
• Capital – Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.
• Financial Literacy – The ability to understand and use various financial skills, including personal financial management, budgeting, and investing.
• Wealth Management – A high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning, and legal or estate planning.
• Financial Planning – The task of determining how a business will afford to achieve its strategic goals and objectives.
• Credit Score – A numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual.
• Bankruptcy – A legal status of a person or other entity who cannot repay the debts it owes to creditors.
• Fiscal Policy – The use of government revenue collection and expenditure to influence the economy.
• Monetary Policy – The policy adopted by the monetary authority of a country that controls either the interest rate payable on very short-term borrowing or the money supply.
• Trade Deficit – An economic measure of a negative balance of trade, where a country's imports exceeds its exports.
• Trade Surplus – An economic measure of a positive balance of trade, where a country's exports exceed its imports.
• Foreign Direct Investment (FDI) – An investment made by a firm or individual in one country into business interests located in another country.
• Balance of Payments – A record of all monetary transactions between a country and the rest of the world.
• Central Bank – A national bank that provides financial and banking services for its country's government and commercial banking system.
• Securities – A financial instrument that represents some type of financial value.
• Derivatives – Financial contracts that derive their value from an underlying asset. These could be stocks, bonds, commodities, currencies, interest rates, or market indexes.
• Equity – The value of an ownership interest in property, including shareholders' equity, in a business.
• Dividends – A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
• Capital Gains – The increase in value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.
• Liquidity – The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
• Portfolio – A range of investments held by a person or organization.
• Hedge Funds – A limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.
• Venture Capital – A type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential.
• Financial Market – Any marketplace where the trading of securities, including equities, bonds, currencies and derivatives, occurs.