Vocabulary

• Personal Finance – The process of planning and managing personal financial activities such as income generation, spending, saving, investing, and protection.
• Credit History – A record of a borrower's responsible repayment of debts.
• Credit Score – A numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual.
• Debt – Money that is owed or due.
• Income – Money that an individual or business receives in exchange for providing a good or service or through investing capital.
• Investment – The action or process of investing money for profit or material result.
• Budget – An estimate of income and expenditure for a set period of time.
• Savings – Money set aside for future use.
• Interest – The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
• Loan – A sum of money that is expected to be paid back with interest.
• Mortgage – A loan secured by real property through the use of a mortgage note.
• Credit Card – A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale.
• Financial Planning – A comprehensive evaluation of an individual's current and future financial state.
• Asset – A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
• Liability – A company's financial debt or obligations that arise during the course of its business operations.
• Insurance – A contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses.
• Retirement Plan – A financial arrangement designed to replace employment income upon retirement.
• Tax – A compulsory contribution to state revenue, levied by the government on workers' income and business profits.
• Stock Market – A public market for the trading of company stock and derivatives at an agreed price.
• Bond – A fixed income instrument that represents a loan made by an investor to a borrower.
• Dividend – A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
• Capital Gain – A rise in the value of a capital asset that gives it a higher worth than the purchase price.
• Portfolio – A range of investments held by a person or organization.
• Mutual Fund – An investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets.
• Exchange Traded Fund (ETF) – A type of investment fund and exchange-traded product, with shares that are tradable on a stock exchange.
• Inflation – A general increase in prices and fall in the purchasing value of money.
• Deflation – Reduction of the general level of prices in an economy.
• Bankruptcy – A legal status of a person or other entity who cannot repay debts to creditors.
• Equity – The value of an asset after deducting the cost of liabilities.
• Fixed Costs – Business expenses that are not dependent on the level of goods or services produced.
• Variable Costs – Costs that change in proportion to the good or service that a business produces.
• Revenue – The income generated from normal business operations.
• Profit – The financial gain realized when revenue exceeds expenses.
• Liquidity – The availability of liquid assets to a market or company.
• Risk Management – The forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.
• Diversification – The process of allocating capital in a way that reduces the exposure to any one particular asset or risk.
• Leverage – The use of borrowed money to finance an investment.
• Hedge – An investment to reduce the risk of adverse price movements in an asset.
• Bull Market – A market in which share prices are rising, encouraging buying.
• Bear Market – A market in which prices are falling, encouraging selling.
• 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.
• FICO Score – A type of credit score created by the Fair Isaac Corporation.
• Secured Loan – A loan in which the borrower pledges some asset as collateral.
• Unsecured Loan – A loan that is issued and supported only by the borrower's creditworthiness, rather than by a type of collateral.
• Credit Limit – The maximum amount that a person can borrow from a bank or other financial institution.
• Amortization – The process of gradually paying off a debt.
• Compound Interest – The addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.
• Depreciation – A reduction in the value of an asset over time, due in particular to wear and tear.
• Net Worth – The amount by which assets exceed liabilities.