Glossary

Bond
A form of debt; borrowed money that needs to be repaid, most often with interest. Debt securities come with the promise that lenders would be paid back first, resulting in a debt securities tending to be less risky and more stable than equity. In exchange for the tat preferential treatment, lenders receive what is typically a lower but more consistent return.
Broker (in the context of a home)
A broker is someone who acts as a middleman between a seller and a buyer of real estate/real property. Their job is to find sellers who are interested in selling a property and finding buyers who are interested in buying.
Broker (in the context of finance)
In finance, a broker is someone who buys and sells securities on a stock exchange on behalf of clients.
Credit Score
A numerical score — ranging from 300 to 850 that represents your creditworthiness, how trustworthy you are with money.
Day trading
The act of buying and selling financial instruments within the same day.
Deductible
A tax-deductible is a reduction in tax obligation from a taxpayer's gross income.
Diversification
A risk management strategy that seeks to decrease the volatility of a portfolio by including a number of investments in different areas. Diversification reduces the risk that poor performance of a single company or industry, or a downturn in any one region, will significantly lower the value of your portfolio, for example, investing in a tech company, a bank, and a utility.
Down Payment (for a mortgage)
In terms of a mortgage, it's the first payment you make on the loan. Most mortgage lenders require a down payment of at least 3 percent and can go up to about 20 percent.
Emergency Fund
A specific stash of money that you set aside to pay bills in case of an emergency-like medical emergency or a job loss.
Exchange Traded Fund (ETF)
An investment finds that tracks a stock or bond index or the value of a commodity. Unlike actively managed funds, ETFs typically have a low expense due to their passive investment strategy and low turnover of securities in the fund.
FHA Loan
A mortgage insured by the Federal Housing Administration that includes mortgages insurance, paid by the borrower, that protects the lender in case of a failure to pay. These loans generally allow for a lower down payment to secure the mortgage.
Fiscal
Relating to government revenue, or taxes.
Financial Adviser
Someone who provides financial advises and/or guidance for clients. They typically have a license for practicing as a professional financial adviser.
Fixed Expenses
Any expense that does not change from period to period. Examples include; Mortgage(s), Rent, Property taxes (if paying monthly), Utility bills (cable, cell, electricity, water, etc.), Lease / car loan payment, Vehicle insurance (if paying monthly), Life / Disability / Extended health (or other) insurance, etc.
Guarantor
In the context of leasing property, a lease guarantor is a third party involved to provide additional security within a rental agreement. The lease guarantor is someone who signs their name to the contract and agrees to pay if the tenant is not able to pay the rent.
Hard credit inquiry
A hard credit inquiry is when your credit history is pulled for review because you've applied for some kind of credit - too many of these negatively impact your credit score.
Hedge fund
A company that invests pooled funds of qualified individuals and that uses various higher-risk strategies to generate active returns for said investors.
Index fund
A type of mutual fund with a portfolio constructed to match or track the components of a market index.
Investment
Something that's purchased with the hope that it will generate income or will appreciate in the future.
Investment return
The profits from an investment, including all income and capital gains.
Liquidity
The degree to which an investor may quickly buy or sell an asset without having a material impact on its price. Liquid markets are characterized by a high volume of activity.
Mortgage
Simply put, it's a loan used to buy a home. The loan provides people with the money to buy a house, and the loan is guaranteed by the house. A loan provided by a bank or other creditor in exchange for the title of the debtor's property, where the title returns to the debtor upon full repayment of the loan.
Mutual fund
A type of investment fund that managed by a professional money manager who invests the fund's capital in a diversified portfolio according to the objectives and strategies outlined by the fund. Mutual funds allow investors to invest in diversified portfolios that could be difficult to construct with a small amount of capital and to also benefit professional management.
Property tax
A property tax is a tax assessed on real estate and something that's determined by the value of the property and set by the local/municipal government.
Renter's insurance
An insurance policy that serves to protect some of the assets and activities of the renter of a given property.
Rule of 72
A simple rule to determine how long an investment will take to double. Simply divide the number 72 by your compound annual interest rate. (And remember, a rate of 5 percent would be expressed a 5, no .05)
Savings
Savins is simply money that has been set aside for a future use, determined or otherwise.
Side hustle
Paying work you take on outside your regular job to increase your revenue and/or strengthen your skill set.
Stocks
Stocks represent ownership interests in a company and the equity value available to shareholders after all debts are settled. Stocks provide investors with the opportunity for their ownership stakes to become more valuable as their companies generate more profits, but equity is also riskier than debt, exposing investors to the risk that their investments will decrease in value if the company performs below expectations or, other yet, a bankruptcy wipes out their shares.
Survival Expenses
If your Living Expenses is what cost you to live confortable, then your Survial Expenses are your absolute baseline expenses.
Variable Expenses
These expenses over which you have the most control. This is money spent based on lifestyle choices and family needs. Other than food, clothing and transportation, most of these categories are voluntary. Examples include; Groceries, Personal care items (drugstore), Fuel / public transportation costs, Parking, Clothing & shoes, Daycare, Work lunches & snacks, Eating out, Entertainment, Tobacco / alcohol, Lottery, Babysitting, Sports & recreation, other hobbies, Hair care / salon services, Magazines / newspapers / books, Children’s lessons and activities
Volatility
Measures how much the value of a stock or other security has fluctuated over time. Securities with higher volatility are riskier, but also typically offer the potential for bigger gains (or bigger losses). More stable ones are less likely to provide much more than a modest return.
Property taxes
A tax levied on the value of a property, usually real estate.

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