| A | B |
|---|
| Allowance | an amount of money parents give kids to help them learn to manage money |
| Annual Percentage Rate | APR |
| APR | the rate of interest stated in a percent being charged for a loan over a year's time which includes interest, transaction fees, and service fees |
| Appreciate | to grow in value - used in relation to investments: stocks, etc. which are now worth more than you paid for them |
| Asset | any item of value that you own (house) - despite what Rich Dad, Poor Dad says |
| ATM | Automatic Teller Machine |
| Balance | difference between the amount owed and the amount paid |
| Bankruptcy | a state of being in so much debt that you are legally declared unable to pay in full the people and companies you owe. When you legally declare yourself bankrupt in some states |
| Blue Chip Stock | a name given to the stocks of major corporations (derived from the most highly valued poker chip) |
| Bond | an IOU issued by a corporation or government that confirms you are lending the corporation or government money. Bonds pay interest regularly to lenders. At the end of the term of the bond |
| Broker | a licensed professional who advises people about investments; also helps people buy and sell stocks |
| Budget | a plan you create for controlling spending and encouraging saving. |
| Certificate of Deposit | a type of investment that requires you to invest money for a certain length of time and guarantees the same rate of return (interest) for that entire time. CDs usually require a minimum deposit. |
| Charge | to borrow money (from a store |
| Check register | (sometimes called a check ledger). This booklet is usually kept in your checkbook |
| Collectibles | objects such as art |
| Commodities | raw materials such as oil |
| Compound Interest | interest on an investment |
| Corporation | the most common form of organizing a business the organization's total worth is divided into shares of stock |
| Credit | a loan that enables people to buy something now and to pay for it in the future. |
| Credit Limit | the highest amount you may charge on a credit card. Your limit is set by your card company's opinion of your ability to handle debt. |
| Credit History | a record of your borrowing and paying habits. Credit reporting companies track your history and supply this information to credit card companies |
| Credit Rating | Credit agencies are companies that keep track of how you pay your debts (bills). Do you pay on time? Do you make the required payments? When you want to borrow money from a bank or apply for a credit card |
| Debit Card | This plastic card looks like a credit card |
| Debt | money or goods you owe. |
| Deposit | to put money into a bank or investment account. |
| Diversify | to spread out the money you invest into different types of investments: bonds |
| Dividend | a payment made by a company to a stockholder to share in the company's profits. |
| Discount | to reduce from an original price or an item's full worth. |
| Earned Income | wages paid in exchange for work. |
| Entrepreneur | a person who assumes the risk to start a business with the idea of making a profit. |
| Expenses | things you pay money for - both needs and wants. |
| FDIC-Insured | Established as part of the Banking Act of 1933 |
| Finance Charge | the fee you pay when you do not pay off the entire credit card debt within a single payment period |
| Fixed | not changing. Fixed interest rates never change during the time of the investment or loan. |
| Fixed Expenses | expenses which stay basically the same from month to month |
| Grace Period | the time |
| Income Tax | money that wage earners pay the government to run the country. The amount of the tax depends upon how much you earn. |
| Insufficient Funds | a phrase that means you did not have enough money to cover an expense. Usually checks that bounce are returned stamped with the phrase |
| Insure | to protect yourself from loss. You pay premiums (payments) to an insurance company who |
| Insured Savings | accounts that are insured up to $100 |
| Interest | the amount paid by a borrower to a lender for the privilege of borrowing the money. |
| Interest Rate | the price paid for the use of someone else's money expressed as an annual percentage rate |
| Invest | to put your money into CDs |
| Lien | a right given to a lender over a borrower's property or money when the borrower cannot pay a debt. |
| Liquidity | - how quickly an asset (any item of value that you own) can be turned into cash. In other words |
| Loan | money or an object that is lent |
| Minimum Payment | the smallest amount you are required to pay a lender each month on a debt. |
| Money Market Account | a savings account offered by a bank (or a mutual fund). The account typically requires 1) a minimum deposit and 2) that you maintain a minimum balance. The account invests in certificates of deposit and treasury bills and pays a rate of interest that rises and falls with the economy. |
| Mutual Fund | a savings fund that uses cash from a pool of savers to buy a wide range of securities |
| Opportunity Cost | the next best alternative that is given up when a choice is made. |
| Penny Stock | a nickname for extremely low priced stock |
| Percentage | a way of measuring. The number 100 (which stands for the whole amount) is usually divided into 100 smaller |
| Profit | the money you've earned after you subtract a) any money you had to spend to make the product or perform the service. B) any taxes that had to be paid on your earnings. |
| Rate of Compounding | When an account compounds interest (figuring interest on interest already earned) it does so regularly. Compounding can take place annually |
| Real Estate | property in the form of land or buildings. |
| Return | the amount of money a saver receives from a savings account or fund. The return is usually talked about as a percentage |
| Risk | the likelihood that you will lose money on an investment. |
| Rule of 72 | math formula that determines the number of years needed to double your money at a given interest rate. Here's how it works: you divide 72 by the interest rate. Therefore |
| Save | hanging onto your money for a future use instead of spending it. Saving is the opposite of spending. |
| Savings Account | a bank account that pays you interest for keeping your savings in it. Banks use your money to make loans |
| Scarcity | a lack of something |
| Share | a unit of ownership in an investment or a company. |
| Shareholder | someone who owns stock in a company. |
| Social Security Tax | a tax used to fund a program of the US government that gives money to elderly people. The elderly receive funds because the federal government has deducted money from each of their paychecks during the course of their working lives. The money taken out of their paychecks has been deposited into the Social Security fund. Employers |
| Sole Proprietor | a business owned by a single person. |
| Splitting | to divide stock in order to lower its price so that more people will invest in it. In a two-to-one split |
| Standard of Living | the level of material well-being of an individual or group. |
| Stock | a certificate representing a share of ownership in a company. |
| Stock Market | an organized way for 1) people to buy and sell stocks and 2) corporations to raise money. There are three widely known stock exchanges: The New York Stock Exchange |
| Unearned Income | money you make that is not the result of your labor |
| U.S. Bond | a kind of investment in which you lend money to the government for a certain amount of time and at a certain interest rate. You are paid interest according to the terms of your bond. At the end of the agreed-on time |
| Variable Expenses | kinds of spending that can be controlled and typically change from month to month. For example |
| Withdraw | take money out of an account. |
| Withdrawal | the act of taking money out of an account. |
