Vocabulary

• Self-Employed – A person who works for themselves instead of an employer, but drawing income from a trade or business that they operate personally.
• Financial Planning – The process of determining a person's financial goals, purposes in life, and life's priorities, and after considering their resources, risk profile and current lifestyle, to detail a balanced and realistic plan to meet those goals.
• Tax Planning – The analysis of a financial situation or plan from a tax perspective to align financial goals with tax efficiency planning.
• Income – The monetary payment received for goods or services, or from other sources, such as rents or investments.
• Expenses – The cost required for something; the money spent on something.
• Profit – Financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
• Loss – The amount of money lost by a business or organization.
• Business Plan – A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement.
• Budget – An estimate of income and expenditure for a set period of time.
• Investments – The action or process of investing money for profit or material result.
• Assets – A useful or valuable thing, person, or quality.
• Liabilities – A company's legal debts or obligations that arise during the course of business operations.
• Equity – The residual interest in the assets of an entity after deducting liabilities.
• Cash Flow – The total amount of money being transferred into and out of a business.
• Retirement Planning – The process of determining retirement income goals and the actions and decisions necessary to achieve those goals.
• Insurance – A contract in which an individual or entity receives financial protection or reimbursement against losses.
• Interest Rates – The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
• Diversification – The process of allocating capital in a way that reduces the exposure to any one particular asset or risk.
• Risk Management – The forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.
• 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.
• Debt – Money that is owed or due.
• Credit Score – A number assigned to a person that indicates to lenders their capacity to repay a loan.
• Savings Account – A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.
• Pension Plan – A type of retirement plan, usually tax exempt, where an employer and/or employee contribute to a pool of funds set aside for an employee's future benefit.
• Mortgage – A legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property.
• Loan – A thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
• Entrepreneur – A person who sets up a business or businesses, taking on financial risks in the hope of profit.
• Financial Statement – Written records that convey the business activities and the financial performance of a company.
• Balance Sheet – A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time.
• Income Statement – A financial statement that measures a company's financial performance over a specific accounting period.
• Cash Flow Statement – A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.
• Sole Proprietorship – A type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity.
• Partnership – A business organization in which two or more individuals manage and operate the business.
• Corporation – A company or group of people authorized to act as a single entity and recognized as such in law.
• Capital Gains – The profit realized on the sale of a non-inventory asset that was greater than the amount realized on the sale.
• Depreciation – A method of allocating the cost of a tangible asset over its useful life.
• Break-even Point – The point at which total cost and total revenue are equal, i.e., "break even".
• Forecasting – The process of making predictions of the future based on past and present data and most commonly by analysis of trends.
• Dividends – A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits or reserves.
• ROI (Return on Investment) – A ratio between net profit and cost of investment. A high ROI means the investment gains compare favorably to its cost.
• Working Capital – The capital of a business which is used in its day-to-day trading operations.
• Leverage – The use of borrowed money (debt) to boost one's investment return.
• Equity Financing – The process of raising capital through the sale of shares in an enterprise.
• Debt Financing – The process of raising capital through borrowing, typically in the form of a loan from a bank.
• Crowdfunding – The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.
• Venture Capital – Capital invested in a project in which there is a substantial element of risk, typically a new or expanding business.
• Angel Investor – An affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.
• Initial Public Offering (IPO) – The first sale of stock by a company to the public.
• Financial Advisor – A professional who provides financial services to clients based on their financial situation.
• Franchise – A legal and commercial relationship between the owner of a trademark, service mark, trade name, or advertising symbol and an individual or firm who wishes to use that identification in a business.