Informational Resources Curated for You
Explore a wealth of resources thoughtfully curated to support and empower your financial journey. Suggestions or additions? Let us know!
Helpful Links
U.S. Government Websites
California Government Websites
Retirement Websites
Social Security Quick Links
- Social Security Login
- About Social Security
- When Planning for Retirement
- Preparing for Social Security Benefits
- Apply for Social Security
- Manage SS Benefits
- Benefits Overview
- Replace Social Security Card
- Report Stolen Social Security Number
- Planning for Medicare
- Sign Up for Medicare
- Manage Medicare Benefits
- For Employers & Businesses
IRS Website Quick Links
Credit Information Websites
Financial Websites
Financial News Websites
Our Glossary
#
1035 Exchange
A way to move money from one life insurance policy or annuity contract to another without paying taxes at the time of the exchange. This option is useful when upgrading or changing contracts to better suit your needs.
12b-1 Fee
An annual fee charged by some mutual funds to cover marketing and distribution expenses.
401(k) Plan
A retirement savings plan offered by employers that lets employees save part of their paycheck before taxes are taken out. The money grows over time and is taxed later, usually when you withdraw it during retirement.
401(k) Loan
A feature of some 401(k) plans that lets you borrow money from your own retirement savings. You repay the amount over time with interest. If it is not repaid properly, the borrowed amount could be taxed as income.
403(b) Plan
A type of retirement plan for employees of certain nonprofit organizations, public schools, and other tax-exempt groups. It works similarly to a 401(k), allowing pre-tax contributions and tax-deferred growth.
457 Plan
A deferred compensation retirement plan available for certain state and local government employees and some nonprofit organizations.
459 Plan
A deferred compensation plan for employees of certain tax-exempt organizations, allowing them to defer income until a future date.
529 Plan
A tax-advantaged savings plan designed to encourage saving for future education costs, sponsored by states, state agencies, or educational institutions.
52-Week High
The highest price at which a stock has traded during the past 52 weeks.
52-Week Low
The lowest price at which a stock has traded during the past 52 weeks.
10-Year Treasury Note
A U.S. government debt security with a fixed interest rate and maturity of 10 years, often used as a benchmark for interest rates.
30-Year Treasury Bond
A U.S. government debt security with a fixed interest rate and maturity of 30 years.
A
Account
A record of financial transactions and balances related to a specific individual, organization, or purpose, such as a bank account or investment account.
Account Balance
The total amount of money currently held in an account reflecting deposits, withdrawals, and earnings.
Account statement
A printed or online statement of all the funds paid out by or paid into your account during a statement cycle.
Accumulated Earnings
The total net income a company has retained, rather than distributed as dividends, over its lifetime.
Active Management
An investment strategy where a portfolio manager makes specific investments with the goal of outperforming a benchmark index.
Adjusted Gross Income (AGI)
An individual’s total gross income minus specific deductions, used to determine taxable income in the U.S.
Adjustable-Rate Mortgage (ARM)
A mortgage loan with an interest rate that adjusts periodically based on a specified index, often starting with a fixed rate for a set term.
Administrator
An individual or entity responsible for managing an estate, trust, or retirement plan, ensuring proper execution according to legal or contractual terms.
Adviser
A professional who provides financial advice or investment guidance to clients.
After Tax Return
The amount you actually earn from an investment after subtracting any taxes owed. It reflects your real earnings and helps compare taxable and tax-free options.
Aggressive Growth Fund
A type of investment fund focused on stocks that have the potential for rapid growth. These funds can offer high returns but also carry a higher level of risk and price swings.
Alpha
A measure of an investment’s performance on a risk-adjusted basis, indicating the excess return relative to a benchmark.
Alternative Investments
Assets that do not fall into conventional categories like stocks, bonds, or cash, including real estate, hedge funds, private equity, and commodities.
Alternative Minimum Tax (AMT)
A separate way of calculating income tax that limits certain deductions and tax breaks. It’s meant to ensure that people with high incomes still pay a minimum amount of tax.
Annual Contribution Limits
The maximum amount of money that can be contributed to tax-advantaged accounts (e.g., IRAs, 401(k)s) each year, as set by the IRS.
Annual Percentage Rate (APR)
The yearly cost of borrowing money, shown as a percentage. It includes both the interest rate and certain fees, making it easier to compare loans.
Annual Percentage yield (APY)
The total amount of interest paid by the bank on your deposit account (checking, savings, CDs, IRAs) during the year. Includes both interest paid on the amount held in the account, as well as compounded interest for the year.
Annual Report
A document that public companies provide each year with details about their financial performance, operations, and plans. It helps investors understand the health and direction of the company.
Annualized Return
The average yearly return on an investment over a given period, accounting for compounding and expressed as a percentage.
Annuity
A financial product that provides regular payments over time, often used for retirement income. You pay into it in one or more contributions, and it starts paying you later, either for a set time or for life.
Appraisal
An expert’s estimate of how much something is worth, such as a house or property. It’s often used when buying, selling, refinancing, or insuring property.
Appreciation
An increase in the value of an asset over time.
Asset
Anything valuable you own that can help you financially—like cash, property, investments, or personal items. Assets are important for understanding your net worth.
Asset Allocation
The process of dividing your investments among different categories—such as stocks, bonds, or cash—to help balance risk and reward according to your goals and timeline.
Asset Class
A group of similar investments that behave in the same way in the market. Examples include stocks, bonds, real estate, and cash. Each asset class carries its own level of risk and potential return.
Attribution Analysis
A technique used to evaluate the performance of an investment portfolio by analyzing the sources of returns and the manager’s decisions.
Audit
A formal review of financial information, done to make sure everything is accurate and follows the rules. Audits can be conducted by independent professionals or by government agencies.
Authorized Participant
An entity authorized to create or redeem shares of an exchange-traded fund (ETF), facilitating liquidity and trading.
Automated Clearing House (ACH)
A nationwide funds transfer network that enables participating financial institutions to electronically credit, debit and settle entries to bank accounts.
Automatic Funds Transfer
A scheduled movement of money from one bank account to another, often used for savings or bill payments.
Automatic Payment
A pre-authorized withdrawal of funds to pay recurring bills, such as utilities or loans, from a bank account or credit card.
Automatic Reinvestment
An option that uses your earnings—like interest or dividends—to automatically buy more of the same investment. It helps grow your investment without needing to take any action.
Available Balance
The amount of money in a bank account that is available for immediate use, accounting for pending transactions.
Average Daily Balance
A method of calculating interest or fees based on the average balance in an account each day during the billing cycle.
Award Agreement
A legal document outlining the terms and conditions of an equity grant, such as vesting schedules, restrictions, and rights.
Award Price
The fair market value of a stock or security at the time it is granted to an employee under an equity compensation plan.
B
Balanced Fund
A mutual fund that invests in a mix of stocks, bonds, and other securities to balance risk and return.
Balanced Mutual Fund
A mutual fund designed to provide both growth and income by investing in a diversified portfolio of stocks and bonds.
Balloon Mortgage
A mortgage loan that requires a large lump-sum payment (balloon payment) at the end of the loan term after a series of smaller periodic payments.
Bankruptcy
A legal process through which individuals or businesses unable to pay debts can seek relief from some or all obligations.
Basis Point
A unit of measure equal to 0.01% (one hundredth of a percent), commonly used to describe changes in interest rates or investment returns.
Bear Market
A market condition characterized by falling prices, typically defined as a decline of 20% or more from recent highs.
Beneficiary
A person or entity entitled to receive benefits or assets from a trust, insurance policy, retirement plan, or will.
Beta
A measure of a stock’s or portfolio’s volatility relative to the overall market; beta greater than 1 indicates higher volatility.
Bill Pay
An online banking service that allows customers to pay bills electronically from their checking account.
Blue Chip Stock
Shares of large, well-established, and financially sound companies known for stable earnings and reliable dividends.
Bond
A debt security in which the issuer owes the holder a debt and is obliged to pay interest and repay principal at maturity.
Bond Fund
A mutual fund or ETF that invests primarily in bonds and other debt securities.
Bond Ladder
An investment strategy involving the purchase of bonds with staggered maturities, designed to manage interest rate risk and provide steady income.
Book Value
The net asset value of a company, calculated as total assets minus liabilities, often used to value stocks.
Bounced Check
A check that cannot be processed because the account holder does not have sufficient funds, resulting in non-sufficient funds (NSF).
Broker
An individual or firm that acts as an intermediary to buy and sell securities on behalf of clients.
Brokerage Account
An investment account that allows an individual to buy and sell securities through a brokerage firm.
Budget
A financial plan that outlines income and expenses over a specific period.
Bull Market
A market condition characterized by rising prices and investor optimism, often lasting months or years.
Buy-and-Hold
An investment strategy where securities are purchased and held for a long period regardless of market fluctuations.
Buy-Sell Agreement
A legally binding agreement among business owners that outlines the terms for the sale or transfer of ownership interests.
C
Call Option
A financial contract giving the buyer the right, but not the obligation, to purchase an asset at a specified price within a specific time period.
Canceled Check
A check that has been cleared by the bank, paid to the payee, and returned to the account holder as proof of payment.
Capital Gain
The profit realized from the sale of an asset when the sale price exceeds the purchase price.
Capital Gains Tax
A tax on the profit realized from the sale of a capital asset, such as stocks, bonds, or real estate, when the sale price exceeds the purchase price.
Capital Loss
The loss incurred when an asset is sold for less than its purchase price.
Capital Market
A financial market where long-term debt or equity-backed securities are bought and sold.
Cash Alternatives
Low-risk, highly liquid investment vehicles such as money market funds, Treasury bills, and certificates of deposit, used to preserve capital.
Cash Flow
The net amount of cash and cash-equivalents moving into and out of a business or investment.
Cash Surrender Value
The amount an insurance policyholder receives if they cancel a permanent life insurance policy before it matures or the insured dies.
Cashier’s Check
A check guaranteed by a bank, drawn from the bank’s own funds and signed by a cashier or teller.
Certificate of Deposit (CD)
A savings certificate issued by a bank with a fixed maturity date and specified interest rate, typically offering higher returns than a regular savings account.
Certified Check
A personal check verified and guaranteed by the issuing bank that the signature is genuine and funds are available.
Charitable Lead Trust
A trust that provides income to a charity for a set period, after which the remaining assets pass to beneficiaries such as family members.
Charitable Remainder Trust
A trust that provides income to a non-charitable beneficiary for life or a set term, after which the remaining assets go to a designated charity.
Checking Account
A bank account that allows for deposits, withdrawals, and writing checks, typically used for everyday transactions.
Claim
A formal request made by an insured party to an insurance company for coverage or compensation for a covered loss or policy event.
Cliff
A type of vesting schedule where no equity vests until a specified period has passed, at which point a lump sum of equity vests all at once.
Closing Costs
Fees and expenses paid during the final stages of a real estate transaction, including appraisal fees, title insurance, and attorney fees.
COBRA
A federal law allowing individuals to temporarily continue their employer-sponsored health insurance coverage after losing their job or experiencing another qualifying event.
Coinsurance or Co-Payment
The portion of medical costs that the insured is required to pay under a health insurance plan, either as a percentage (coinsurance) or flat fee (co-payment).
Collateral
An asset pledged by a borrower to secure a loan, which the lender can seize if the borrower fails to repay the loan.
Combined Balance
The total balance across multiple linked bank accounts, often used to meet minimum balance requirements for fee waivers.
Commercial Paper
A short-term, unsecured promissory note issued by corporations to finance short-term liabilities, typically with maturities of 270 days or less.
Commission
A fee paid to a broker or agent for executing a transaction or providing investment advice.
Common Stock
A type of equity security that represents ownership in a corporation, typically entitling the shareholder to vote on corporate matters and receive dividends.
Community Property
A form of joint ownership of property between spouses, where most property acquired during the marriage is owned equally, recognized in certain U.S. states.
Compound Growth
The increase in value of an investment due to earnings generating additional earnings over time, also known as compounding.
Compound Interest
Interest calculated on both the principal amount and the accumulated interest from previous periods.
Consumer Price Index (CPI)
A measure that examines the weighted average of prices of a basket of consumer goods and services, often used to gauge inflation.
Convertible Bond
A bond that can be converted into a specified number of shares of the issuing company’s common stock, usually at the bondholder’s discretion.
Convertible Term Insurance
A term life insurance policy that allows the policyholder to convert it into a permanent life insurance policy without undergoing a medical exam.
Corporate Bond
A debt security issued by a corporation to raise capital, with a promise to pay interest and return principal at maturity.
Corporation
A legal entity that is separate from its owners, offering limited liability, perpetual existence, and the ability to issue stock.
Cost Basis
The original value of an asset for tax purposes, typically the purchase price plus commissions and fees, used to determine capital gains or losses when sold.
Coverdell Education Savings Account (ESA)
A tax-advantaged investment account designed to help families save for education expenses, allowing tax-free withdrawals for qualified costs.
Credit Score
A numerical rating that reflects an individual’s creditworthiness, based on credit history, outstanding debts, and payment behavior, commonly ranging from 300 to 850.
Cryptocurrency
A digital or virtual currency that uses cryptography for security and operates on decentralized blockchain technology, such as Bitcoin or Ethereum.
Current Ratio
A financial ratio that measures a company’s ability to pay short-term liabilities with its short-term assets, calculated as current assets divided by current liabilities.
Custodian
A financial institution that holds and safeguards financial assets on behalf of clients.
D
Death Benefit
The amount paid to a beneficiary upon the death of the insured under a life insurance policy.
Debit
An accounting entry that results in either an increase in assets or a decrease in liabilities or equity on a company’s balance sheet.
Debit Card
A payment card that deducts money directly from a consumer’s checking account to pay for purchases or withdraw cash.
Debt
Money borrowed by one party from another under the agreement that it will be paid back, typically with interest.
Debt-to-Equity Ratio
A financial ratio indicating the relative proportion of shareholders’ equity and debt used to finance a company’s assets, calculated as total liabilities divided by shareholders’ equity.
Debt-to-Income Ratio
A personal finance measure that compares an individual’s monthly debt payments to their gross monthly income, used by lenders to assess creditworthiness.
Deed
A legal document that transfers ownership of real estate from one party to another.
Deductible
The amount a policyholder must pay out-of-pocket before an insurance provider begins to pay for covered expenses.
Deduction
An expense or amount subtracted from gross income to reduce the amount of income that is subject to taxation.
Deferred Annuity
An insurance contract that delays income payments until a future date, allowing investments to grow tax-deferred.
Deferred Compensation
A portion of an employee’s income that is set aside to be paid out at a later date, often used for retirement or tax planning purposes.
Deflation
A decrease in the general price level of goods and services, often associated with reduced consumer demand and economic slowdown.
Defined Benefit Plan
A retirement plan in which the employer guarantees a specific benefit amount upon retirement, typically based on salary and years of service.
Defined Contribution Plan
A retirement plan where contributions are made by the employee, employer, or both, and the final benefits depend on investment performance.
Dependent
A person, typically a child or family member, who relies on another individual for financial support and may qualify the provider for tax benefits.
Deposit
A sum of money placed into a bank account, either electronically, via check, or in cash.
Depreciation
The reduction in value of a tangible asset over time due to wear, age, or obsolescence, used for accounting and tax purposes.
Derivative
A financial instrument that derives its value from an underlying asset, index, or rate, used for hedging or speculative purposes.
Direct Deposit
An electronic transfer of funds directly into a recipient’s bank account, commonly used for payroll, government benefits, and tax refunds.
Direct Rollover
A tax-free transfer of retirement funds from one qualified plan (like a 401(k)) directly to another qualified plan or IRA without the account holder receiving the funds.
Disability Income Insurance
Insurance that provides a portion of an individual’s income if they are unable to work due to illness or injury.
Disability Insurance
A broader term for coverage that pays benefits when an insured person is unable to work due to a qualifying disability.
Disclosure
The act of making information available to investors or clients, often required by law to ensure transparency and informed decision-making.
Discount Rate
The interest rate used to determine the present value of future cash flows or the interest rate the Federal Reserve charges banks for short-term loans.
Discretionary Income
Income remaining after essential living expenses and taxes have been paid.
Diversification
An investment strategy that reduces risk by allocating investments across different asset classes, sectors, or geographic regions.
Dividend
A portion of a company’s earnings paid to shareholders, typically in the form of cash or additional stock.
Dividend Reinvestment Plan (DRIP)
A program allowing investors to automatically reinvest their dividends into additional shares of the company’s stock, often commission-free.
Dollar-Cost Averaging
An investment strategy where a fixed dollar amount is invested at regular intervals regardless of market conditions, aiming to reduce the impact of volatility over time.
Dow Jones Industrial Average (DJIA)
A stock market index that tracks 30 large, publicly traded U.S. companies, used as a measure of overall stock market performance.
Down Payment
An initial payment made toward the purchase of a large asset, such as a home, representing a percentage of the total purchase price.
Durable Power of Attorney
A legal document granting someone authority to make financial or healthcare decisions on another’s behalf, even if the person becomes incapacitated.
E
Earned Income
Income received from active work, such as wages, salaries, tips, and commissions, as opposed to passive income like interest or dividends.
Earnings Per Share (EPS)
A company’s net income divided by its outstanding shares, indicating profitability on a per-share basis.
Earnings Report
A company’s periodic disclosure of financial performance, including revenue, profit, and other key metrics.
Earnings Season
The period following each fiscal quarter when publicly traded companies release their earnings reports.
Earnings Yield
The ratio of earnings per share to stock price, used to evaluate the relative value of a stock.
Early Withdrawal
The removal of funds from an investment or account before a specified date or age, often triggering penalties or taxes.
Economic Indicator
A data point (e.g., GDP, unemployment, CPI) used to assess and predict economic performance.
Economies of Scale
Cost efficiencies gained as a company produces more units, leading to lower per-unit costs.
Effective Annual Rate (EAR)
The actual interest rate earned or paid on an investment or loan after accounting for compounding within the year.
Electronic Communication Network (ECN)
An automated system that matches buy and sell orders for securities electronically without a traditional exchange.
Electronic Funds Transfer (EFT)
A digital movement of money between accounts through systems like ATMs, direct deposit, or online banking.
Emerging Markets
Countries with developing economies and financial markets that offer higher growth potential and risk.
Employee Retirement Income Security Act (ERISA)
A federal law that sets standards for private-sector retirement and health benefit plans to protect plan participants.
Employee Stock Option Exercise
The process by which an employee activates their right to purchase company stock at a predetermined exercise (strike) price, as granted through an employee stock option plan.
Employee Stock Ownership Plan (ESOP)
An employer-sponsored plan giving workers ownership interest in the company through stock allocation.
Employee Stock Purchase Plan (ESPP)
A company program that allows employees to purchase company stock, often at a discount and through payroll deductions, sometimes with a lookback feature.
Employer-Sponsored Retirement Plan
A retirement savings plan offered by an employer, such as a 401(k) or 403(b), allowing employees to contribute pre-tax or after-tax income toward retirement.
Emergency Cash
A financial service offering expedited access to funds in emergency situations, such as lost or stolen cards.
Encumbrance
A legal claim or restriction on property, such as a mortgage or lien, affecting its transfer or value.
Enterprise Value (EV)
A comprehensive measure of a company’s total value, including market cap, debt, and excluding cash.
Equity
Ownership in a company, typically in the form of stock, or the value of an asset after liabilities.
Equity Award Agreement
A legal contract outlining the terms and conditions of equity compensation granted to an employee, including vesting schedules, exercise rules, transfer restrictions, and termination provisions.
Equity Compensation
Non-cash pay provided to employees in the form of company ownership, such as stock options, RSUs, or stock purchase plans.
Equity Fund
A mutual fund or ETF that primarily invests in stocks for long-term capital appreciation.
Equity Index
A benchmark that tracks the performance of a group of stocks, representing a market or sector.
Equity-Linked Security
A structured investment whose return is tied to the performance of an equity or equity index.
Equity Security
A financial instrument representing ownership in a company, typically in the form of common or preferred stock.
Escrow
An arrangement where a neutral third party holds assets or funds until specific conditions are met.
Estate Management
The process of managing, distributing, and settling an individual’s assets during life and after death.
Estate Planning
The strategic organization of one’s assets, wills, trusts, and taxes for efficient distribution after death.
Estate Tax
A tax imposed on the transfer of a deceased person’s estate before distribution to heirs.
Estimated Taxes
Quarterly tax payments made by individuals with income not subject to withholding, such as self-employment or investment income.
Exchange-Traded Funds (ETFs)
A pooled investment that trades like a stock and holds assets such as stocks, bonds, or commodities.
Eurobond
A bond issued in a currency not native to the country of issue, typically used for international financing.
European Option
A financial option that can only be exercised on its expiration date.
Ex-Dividend Date
The cutoff date to receive the next dividend; investors buying after this date are not entitled to the dividend.
Excess Return
The return of an investment above the risk-free rate or benchmark index.
Exchange
A regulated marketplace where financial instruments such as stocks, bonds, and derivatives are traded.
Exchange Rate
The value of one currency in relation to another, used in foreign exchange markets.
Exchange-Traded Note (ETN)
A debt security that tracks an underlying asset or index and trades like a stock but is not backed by actual assets.
Executor
A person appointed to administer and settle the estate of a deceased person according to their will.
Executive Bonus Plan
A non-qualified plan where an employer pays for a life insurance policy on a key employee as a benefit or incentive.
Exercise
The act of purchasing stock through a stock option or right when the holder chooses to activate the option.
Exercise and Hold
A strategy where an employee exercises stock options and holds the acquired shares, often used for long-term investment or tax deferral purposes.
Exercise and Sell
A strategy where an employee exercises stock options and immediately sells the acquired shares, often to cover costs or lock in gains.
Exercise Date
The date on which a stock option holder chooses to purchase stock under the terms of the option agreement.
Exercise Price
The fixed price at which an employee can buy shares under a stock option agreement, also known as the strike price.
F
Face Value
The nominal or dollar amount of a bond or other security as stated by the issuer, typically repaid at maturity.
Fair Market Value (FMV)
The price an asset would sell for on the open market under normal conditions between a willing buyer and seller.
Federal Deposit Insurance Corporation (FDIC)
A U.S. government agency that insures deposits at participating banks and savings institutions up to the legal limit.
Federal Income Tax Bracket
The range of income taxed at a given rate under the federal income tax system; as income increases, portions are taxed at higher rates based on a tiered structure.
Federal Reserve System
The central banking system of the United States, responsible for setting monetary policy, regulating banks, and maintaining financial stability.
Fiduciary
A person or institution legally obligated to act in the best financial interest of another party, such as a client or beneficiary.
Fiduciary Duty
A legal obligation that requires acting solely in the best interest of another party in matters of trust and confidence, such as a financial advisor managing a client’s assets.
Filing Status
A classification defining the type of tax return a taxpayer must use, affecting tax rates and standard deductions.
Financial Advisor
A licensed professional who provides clients with financial guidance on investments, retirement, insurance, and estate planning.
Financial Aid
Funding provided to students to help pay for education-related expenses, which may include grants, scholarships, loans, and work-study.
Financial Goals
Personal objectives for managing money, such as saving for retirement, buying a home, or funding education.
Financial Industry Regulatory Authority (FINRA)
A nonprofit organization authorized by Congress to regulate broker-dealers and protect investors in U.S. financial markets.
Financial Plan
A detailed strategy that outlines a person’s or entity’s financial goals and the steps necessary to achieve them.
Financial Planning
The ongoing process of evaluating finances, setting goals, and developing a roadmap for spending, saving, investing, and protecting assets.
Financial Risk
The potential for losing money due to fluctuations in markets, business conditions, or investment performance.
Financial Statement
A formal record of financial activity, typically including a balance sheet, income statement, and statement of cash flows.
First-to-Die Life Insurance
A joint life insurance policy that pays a death benefit upon the death of the first insured person, typically used in estate planning for couples.
Fiscal Policy
Government strategies related to taxation and spending designed to influence economic conditions like inflation and unemployment.
Fixed Annuity
An insurance contract offering guaranteed interest and fixed periodic payments, often used for retirement income.
Fixed Income
Investments that pay a regular interest or dividend, such as bonds, preferred stocks, and certificates of deposit.
Fixed Interest Rate
An interest rate that remains constant over the duration of a loan or investment, regardless of market fluctuations.
Fixed-Rate Mortgage
A mortgage with an interest rate that remains unchanged throughout the life of the loan, providing predictable monthly payments.
Flat Yield Curve
A graphical representation where short- and long-term interest rates are very close, indicating uncertainty about future economic growth.
Flexible Spending Account (FSA)
An employer-sponsored benefit that allows employees to contribute pre-tax dollars to pay for qualified out-of-pocket medical or dependent care expenses.
Float
The time between when a check is written and when the funds are actually withdrawn from the payer’s account.
Floating Interest Rate
An interest rate that can change periodically based on a reference rate or market index, such as the prime rate or SOFR.
Forbearance
A temporary pause or reduction in loan payments granted by a lender, usually during times of financial difficulty.
Foreclosure
The legal process by which a lender takes ownership of a property when the borrower fails to make mortgage payments.
Foreign Exchange (Forex)
The global marketplace for trading national currencies, determining exchange rates through supply and demand.
Form 940
An IRS tax document used by employers to report and pay federal unemployment taxes (FUTA).
Form 941
An IRS tax document used by employers quarterly to report income taxes, Social Security, and Medicare taxes withheld.
Form 1040
An IRS tax document used to file individual annual income tax returns with the Internal Revenue Service.
Form 1040, Schedule A
An IRS tax document attached to Form 1040 used by taxpayers to report itemized deductions such as mortgage interest, medical expenses, state and local taxes, and charitable contributions, which may reduce taxable income.
Form 1040, Schedule B
An IRS tax document attached to Form 1040 used to report taxable interest and ordinary dividends when amounts exceed certain thresholds.
Form 1040, Schedule C
An IRS tax document attached to Form 1040 used by sole proprietors to report income and expenses from a business or profession.
Form 1040, Schedule D
An IRS tax document attached to Form 1040 used to report capital gains and losses from the sale or exchange of assets such as stocks, bonds, or real estate.
Form 1040, Schedule E
An IRS tax document attached to Form 1040 used to report supplemental income or loss from rental real estate, royalties, partnerships, S corporations, estates, and trusts.
Form 1040, Schedule F
An IRS tax document attached to Form 1040 used by farmers to report income and expenses related to farming activities.
Form 1040, Schedule SE
An IRS tax document attached to Form 1040 used to calculate and report self-employment tax owed by individuals who work for themselves.
Form 1120, Schedule M-1
An IRS tax document attached to Form 1120 (corporate tax return) used to reconcile differences between book income and taxable income for corporations.
Form 1120, Schedule M-2
An IRS tax document attached to Form 1120 used to report changes in a corporation’s unappropriated retained earnings during the tax year.
Form 1095-A
An IRS tax document used to report health insurance coverage purchased through the Health Insurance Marketplace.
Form 1098
An IRS tax document used by mortgage lenders to report interest paid on a mortgage during the tax year.
Form 1099
An IRS tax document used to report various types of non-employment income such as interest, dividends, or freelance earnings.
Form 1099-B
An IRS tax document used by brokers to report proceeds from the sale of stocks, bonds, and other securities.
Form 1099-DIV
An IRS tax document used to report dividends and distributions received from stocks, mutual funds, or other investments.
Form 1099-INT
An IRS tax document used to report interest income earned from banks, investments, or other sources.
Form 1099-MISC
An IRS tax document used to report miscellaneous income, such as payments to independent contractors and freelancers.
Form 1099-R
An IRS tax document used to report distributions from retirement accounts such as IRAs, pensions, and annuities.
Form 2555
An IRS tax document used by U.S. citizens living abroad to exclude foreign earned income from U.S. taxation.
Form 4562
An IRS tax document used to claim depreciation and amortization deductions on business assets.
Form 4868
An IRS tax form that taxpayers submit to request an automatic six-month extension of time to file their individual income tax returns.
Form 5329
An IRS tax document used to report additional taxes on IRAs and qualified retirement plans, including early withdrawal penalties.
Form 8283
An IRS tax document used to report non-cash charitable contributions exceeding certain thresholds.
Form 8889
An IRS tax document used to report Health Savings Account (HSA) contributions and distributions.
Form W-2
An IRS tax document used by employers to report wages paid and taxes withheld for employees during the year.
Form W-4
An IRS tax document used by employees to inform employers how much federal income tax to withhold from their paychecks.
Fractional Share
A portion of a whole share of stock, representing less than one full share, often resulting from dividend reinvestment or stock splits.
Fringe Benefits
Non-cash compensation provided by employers, such as health insurance, retirement contributions, or company vehicles.
Front-End Load
A sales charge or commission paid upfront when purchasing shares of a mutual fund, reducing the initial investment.
Full-Service Broker
A brokerage firm that provides a wide range of services, including investment advice, portfolio management, and retirement planning.
Fund
A pooled investment vehicle—like a mutual fund or ETF—that gathers capital from multiple investors to purchase a diversified portfolio of assets.
Fund Family
A group of mutual funds offered by a single investment company, often allowing investors to transfer between funds without fees.
Fund Manager
A professional responsible for executing a fund’s investment strategy and managing its portfolio of securities.
Fundamental Analysis
A method of evaluating securities by analyzing economic, financial, and company-specific factors to determine intrinsic value.
Funding Ratio
The ratio of a pension plan’s or retirement fund’s assets to its liabilities, used to assess whether the fund is adequately financed.
Futures
Financial contracts obligating the buyer to purchase, or the seller to sell, an asset at a predetermined future date and price.
Futures Contract
A standardized agreement to buy or sell an asset at a predetermined price at a future date, commonly used in commodities and financial markets.
Futures Market
An organized marketplace where participants buy and sell futures contracts for commodities, currencies, and financial instruments.
G
Gains
The positive difference between the selling price and the purchase price of an asset, resulting in a profit.
Gains Tax
A tax imposed on the profit realized from the sale or exchange of a capital asset.
Gearing
A measure of financial leverage, calculated as the ratio of a company’s debt to its equity.
Gift
The voluntary transfer of property or assets from one person to another without receiving payment or compensation in return.
Gift Tax
A federal tax applied to the transfer of property or money from one individual to another without receiving something of equal value in return.
Global Fund
A mutual fund or ETF that invests in securities from around the world, including both domestic and international markets.
Good Faith Estimate
An estimate provided by a lender outlining the expected costs and fees associated with a mortgage loan.
Goodwill
An intangible asset that arises when one company acquires another for a price higher than the fair market value of its net identifiable assets.
Government Bond
A debt security issued by a government to finance its spending, considered low-risk relative to other bonds.
Grace Period
A set amount of time after a due date during which a borrower can make a payment without penalty or default.
Grant
A financial award given by a government, foundation, or institution that does not need to be repaid.
Grantor
The person who creates a trust and transfers assets into it.
Grant Agreement
A legal document detailing the specific terms and conditions of a stock or equity grant, including vesting, exercise rights, and restrictions.
Grant Date
The date on which the equity award or stock option is officially granted to the employee.
Grant ID
A unique identifier assigned to a specific equity award or grant for recordkeeping and tracking purposes.
Grant Price
The price set at the time of the grant, often the fair market value of the stock, used as the exercise price for options.
Gross Domestic Product (GDP)
The total monetary value of all goods and services produced within a country’s borders during a specific time period.
Gross Annual Income
The annual total income earned by an individual or business before deductions, taxes, or expenses.
Gross Monthly Income
Total income earned in a month before taxes and other deductions.
Group Life Insurance
A life insurance policy offered to members of a group, typically through an employer, providing coverage at a reduced cost.
Growth Fund
A mutual fund or ETF focused on investing in companies expected to grow at an above-average rate compared to the market.
Growth Investing
A strategy focused on investing in companies expected to grow at an above-average rate.
Growth Stock
Shares of a company anticipated to increase in value at a rate higher than the overall market due to strong earnings potential.
Guarantee
A promise or assurance that a loan or financial obligation will be fulfilled, often provided by a third party.
Guarantor
An individual or entity that agrees to be responsible for another’s debt or obligation if they default.
H
Health Savings Account (HSA)
A tax-advantaged account used to save for qualified medical expenses.
Hedge
An investment strategy used to reduce the risk of adverse price movements in an asset, often by taking an offsetting position.
Hedge Fund
A pooled investment fund that employs advanced strategies to generate returns, often with higher risk and limited regulatory oversight.
High-Yield Bond
A bond rated below investment grade, offering higher interest rates to compensate investors for increased credit risk.
Holder
The person or entity that legally possesses a financial instrument or security.
Holding Period
The length of time an investment is held before being sold or otherwise disposed of.
Home Equity
The difference between the market value of a home and the outstanding mortgage balance; represents ownership value.
Home Equity Line of Credit (HELOC)
A revolving line of credit secured by the equity in a borrower’s home.Borrowers can draw funds as needed up to a set limit, and interest is typically paid only on the amount used. It functions similarly to a credit card and is often used for large expenses such as home improvements or debt consolidation.
Home Equity Loan
A loan secured by the equity in a borrower’s home, typically used for large expenses or debt consolidation.
Homeowners Association (HOA)
An organization in a residential community that enforces rules and maintains common areas for the benefit of its members.
Homeowners Insurance
A policy that protects a homeowner against losses to the property and liability claims from accidents that occur on the property.
Horizontal Merger
A merger between companies operating in the same industry and at the same stage of production.
Housing Market
The market for buying and selling residential properties, influenced by factors like interest rates, supply, and demand.
Human Capital
The economic value of an individual’s skills, knowledge, and experience.
Hypothecation
The practice of pledging an asset as collateral to secure a loan without transferring ownership.
I
Illiquid Asset
An asset that cannot be easily sold or exchanged for cash without a significant loss in value.
Immunization
An investment strategy that aims to shield a portfolio from interest rate risk by matching the duration of assets and liabilities.
Incentive Stock Options (ISOs)
A type of employee stock option that offers favorable tax treatment under the Internal Revenue Code if specific holding and exercise conditions are met.
Income
Money received on a regular basis from work, investments, or other sources.
Income Fund
A mutual fund or ETF that primarily invests in securities that pay regular income, such as dividends or interest.
Income Statement
A financial report showing a company’s revenues, expenses, and profits or losses over a specific period.
Index
A statistical measure of changes in a representative group of individual data points, often used to track the performance of a group of stocks or bonds.
Indexed Annuity
An annuity contract whose returns are based on the performance of a market index, offering a guaranteed minimum and potential for higher returns.
Index Fund
A mutual fund or ETF designed to replicate the performance of a specific market index.
Indexing
An investment strategy involving purchasing securities to match the components of a market index.
Individual Retirement Account (IRA)
A tax-advantaged retirement savings account available to individuals.
Inflation
The rate at which the general level of prices for goods and services rises, reducing purchasing power.
Inflation Risk
The risk that inflation will erode the real value of investment returns.
Initial Public Offering (IPO)
The first sale of stock by a private company to the public, allowing it to raise capital from public investors.
Insider Trading
The buying or selling of securities based on non-public, material information about a company.
Installment Loan
A loan repaid with regular, fixed payments over a set period, such as a mortgage or auto loan.
Institutional Investor
An organization, such as a mutual fund, pension fund, or insurance company, which invests large sums of money in securities.
Interest
The cost of borrowing money, usually expressed as a percentage rate paid by a borrower to a lender.
Interest-Bearing Account
A bank account that earns interest on the deposited funds, such as a savings account or interest-bearing checking account.
Interest Rate
The percentage charged on a loan or paid on an investment for the use of money over time.
Interest Rate Risk
The risk that changes in interest rates will negatively affect the value of an investment, particularly bonds.
Internal Rate of Return (IRR)
The discount rate that makes the net present value of all cash flows from an investment equal to zero.
Intestate
The condition of dying without a valid will, causing the estate to be distributed according to state law.
Invest
To allocate money or capital into an asset, business, or financial instrument with the expectation of generating income or profit.
Investment
An asset or item acquired with the goal of generating income or appreciation over time.
Investment Advisor
A professional who provides advice about securities and manages investment portfolios for clients.
Investment Grade
A credit rating indicating a bond or security is of high quality and low risk of default.
Investment Income
Earnings generated from investments, such as dividends, interest, or capital gains.
Investment Objective
The specific financial goal or purpose that guides an investor’s portfolio strategy.
Investment Portfolio
A collection of assets such as stocks, bonds, and cash equivalents owned by an individual or institution.
Irrevocable Trust
A trust that cannot be modified or terminated without the beneficiary’s consent, often used for estate and tax planning.
Issuer
An entity, such as a corporation or government, that issues securities to raise capital.
J
Junk Bond
A high-yield, high-risk bond rated below investment grade, offering higher interest rates to compensate for greater default risk.
Joint Account
A bank or brokerage account shared by two or more individuals, with equal rights to deposit, withdraw, and manage the account.
Joint Tenancy
A form of property ownership where two or more individuals hold equal shares with rights of survivorship, meaning ownership passes automatically to surviving owners.
Jointly Held Property
Property owned by two or more individuals together, where each owner has an undivided interest and rights to use the entire property.
Judgment
A court order requiring a debtor to pay a creditor a specific sum of money, enforceable through legal means.
Judgment Lien
A lien placed on a debtor’s property as a result of a court judgment, giving the creditor a legal claim to the property until the debt is satisfied.
K
K-1 (Form)
A tax form used to report income from partnerships, S corporations, or trusts.
Keogh Plan
A tax-deferred retirement savings plan available to self-employed individuals and unincorporated businesses.
Kickback
An illegal payment made in return for facilitating a transaction or appointment.
Kicker
An additional feature attached to a security or loan that provides an extra return or incentive to the investor.
Key Employee
An individual considered vital to the success and operation of a business due to their skills, experience, or leadership.
Key Person Insurance
A life insurance policy purchased by a business on the life of a key employee, providing financial protection in case of their death.
Knock-In Option
A type of option that becomes active only if the underlying asset reaches a predetermined price.
Knock-Out Option
An option that becomes worthless or terminates if the underlying asset reaches a specified price level.
L
Laddering
An investment strategy involving purchasing multiple bonds or certificates of deposit with different maturity dates to manage interest rate risk and liquidity.
Lapse
The expiration or termination of a stock option or equity award due to failure to exercise within the specified time or not meeting vesting conditions.
Last In, First Out (LIFO)
An inventory valuation method where the most recently acquired items are sold or used first.
Late Payment Fee
A charge assessed when a payment is made after the due date.
Law of Diminishing Returns
An economic principle stating that adding more of one factor of production will at some point yield lower incremental output.
Legacy Planning
Preparing your assets to support family or causes beyond your lifetime.
Leverage
The use of borrowed funds to increase the potential return on an investment.
Leverage Ratio
A financial metric that compares a company’s debt to its equity or assets to assess financial risk.
Lien
A legal claim or hold on an asset, typically used as collateral to secure a debt.
Life Insurance
A financial contract that pays a tax-free lump sum to chosen beneficiaries upon the insured’s death, offering protection and security for loved ones. It may include cash value, loan options, estate planning, and income replacement features, depending on policy type.
Limited Liability Company (LLC)
A business structure offering owners protection from personal liability while allowing profits and losses to pass through to their personal tax returns.
Limited Partnership
A partnership consisting of at least one general partner with unlimited liability and one or more limited partners whose liability is limited to their investment.
Liquidity
The ease with which an asset can be converted into cash without significantly affecting its price.
Liquidity Risk
The risk that an asset cannot be sold quickly enough in the market to prevent or minimize a loss.
Load
A sales charge or commission on a mutual fund, typically paid when shares are purchased (front-end load) or sold (back-end load).
Loan-to-Value Ratio (LTV)
A ratio used by lenders to assess the risk of a loan, calculated by dividing the loan amount by the appraised value of the collateral.
Lock-in Period
A set period during which investors are not allowed to withdraw funds from an investment.
Lookback
A feature in some employee stock purchase plans allowing the purchase price to be set based on the stock price at an earlier date, typically the grant date or offering date, whichever is lower.
Living Trust
A legal document that places assets into a trust during a person’s lifetime, allowing for management and distribution without probate.
Living Will
A legal document stating a person’s wishes regarding medical treatment and life support in case they become incapacitated.
Long Position
An investment strategy where an investor buys a security expecting its price to rise.
Long-Term-Care Insurance
Insurance that covers costs related to long-term services and support, including nursing home care or home health care.
Loss
The amount by which expenses exceed revenues or when an investment’s sale price is less than its purchase price.
Low-Risk Investment
An investment with a relatively low chance of losing principal or generating lower returns, such as government bonds or savings accounts.
Lump-Sum Distribution
A single payment of the entire balance of a retirement account or pension plan, rather than periodic payments.
M
Management Fee
A fee charged by an investment manager or fund for managing a portfolio, typically calculated as a percentage of assets under management.
Marital Deduction
A tax deduction that allows an unlimited transfer of assets between spouses without incurring federal estate or gift taxes.
Market Capitalization (Market Cap)
The total market value of a company’s outstanding shares, calculated by multiplying the stock price by the number of shares outstanding.
Market Order
An order to buy or sell a security immediately at the best available current price.
Market Price
The current price at which a security or asset is bought or sold in the marketplace.
Market Risk
The risk of losses due to factors that affect the overall performance of the financial markets.
Market Timing
An investment strategy that attempts to predict market movements to buy low and sell high.
Market Value
The current price at which an asset or security can be bought or sold in the marketplace.
Marital Deduction
A tax deduction that allows an unlimited transfer of assets between spouses without incurring federal estate or gift taxes.
Maturity
The date on which a financial instrument, such as a bond, becomes due and the principal must be repaid.
Maturity Date
The date on which the principal amount of a bond or other debt instrument becomes due and payable.
Medicaid
A joint federal and state program that provides health coverage to low-income individuals and families.
Medicare
A federal health insurance program primarily for people aged 65 and older, as well as certain younger individuals with disabilities.
Merger
The combination of two or more companies into a single entity, often to achieve synergies or expand market share.
Minimum Daily Balance
The lowest balance that must be maintained in an account each day to avoid fees or earn interest.
Minimum Payment
The smallest amount a borrower can pay on a credit account to keep it in good standing and avoid penalties.
Modified Adjusted Gross Income (MAGI)
An individual’s adjusted gross income (AGI) with certain deductions and exclusions added back, used to determine eligibility for various tax benefits.
Money Market Account
A type of savings account that typically offers higher interest rates and limited check-writing privileges.
Money Market Fund
A mutual fund that invests in short-term, low-risk debt securities, providing liquidity and modest income.
Money Order
A prepaid, paper-based payment instrument used to safely transfer funds, typically issued by banks or post offices.
Mortgage
A loan used to purchase real estate, secured by the property itself as collateral.
Municipal Bond
A bond issued by a state, municipality, or county to finance public projects, often exempt from federal taxes.
Municipal Bond Fund
A mutual fund or ETF that invests primarily in municipal bonds, providing tax-exempt income to investors.
Mutual Fund
An investment vehicle pooling money from many investors to buy a diversified portfolio of stocks, bonds, or other securities.
N
NASDAQ
National Association of Securities Dealers Automated Quotations. An electronic stock exchange known for listing technology and growth-oriented companies.
Natural Resources
Materials such as land, minerals, water, and forests that occur naturally and can be used for economic gain.
Negative Amortization
A loan situation where the payment is less than the interest due, causing the loan balance to increase over time.
Net Asset Value (NAV)
The value per share of a mutual fund or ETF, calculated by dividing the total value of assets minus liabilities by the number of shares outstanding.
Net Income
A company’s total earnings after deducting expenses, taxes, and costs.
Net Interest Margin
The difference between the interest income generated by banks or financial institutions and the amount of interest paid out to lenders.
Net Present Value (NPV)
The value of future cash flows discounted back to their present value, used to assess the profitability of an investment.
Net Worth
The total assets minus total liabilities of an individual or company, representing their financial position.
New York Stock Exchange (NYSE)
One of the largest and oldest stock exchanges in the world, where stocks and securities are bought and sold through a centralized trading floor.
Nominee
An individual or firm named to act on behalf of another in a legal or financial matter.
Non-Callable Bond
A bond that cannot be redeemed by the issuer before its maturity date.
Non-Contributory Retirement Plan
A retirement plan funded entirely by the employer, requiring no contributions from employees.
Non-Fungible Tokens (NFTs)
Unique digital assets verified using blockchain technology, representing ownership of items such as art, collectibles, or virtual goods.
Non-Qualified Retirement Plan
A retirement plan that does not meet IRS requirements for tax-advantaged status and typically has fewer restrictions but less favorable tax treatment.
Non-Qualified Stock Options (NQSOs)
Stock options granted to employees or others that do not meet IRS requirements for favorable tax treatment, resulting in ordinary income taxation at exercise.
Notary Public
An official authorized to witness signatures, administer oaths, and perform other duties to prevent fraud.
Notary Services
Certified witnessing and authentication of legal documents.
O
Offer Price
The price at which a seller is willing to sell a security.
Offshore Account
A bank or investment account held outside the account holder’s country of residence, often used for diversification or tax planning.
Old-Age, Survivors, and Disability Insurance (OASDI)
A federal program under Social Security that provides retirement, survivor, and disability benefits to eligible individuals.
Online Banking
A digital service that allows users to conduct financial transactions and manage accounts via the internet.
Open-End Fund
A type of mutual fund that issues and redeems shares at their net asset value (NAV) on a continuous basis.
Operating Expense
The costs associated with running a business, excluding the cost of goods sold.
Option
A financial contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price before a certain date.
Option Price
The price at which the holder of an option can buy (call option) or sell (put option) the underlying security.
Options Contract
An agreement that conveys the right, but not the obligation, to buy or sell an underlying asset at a specified price within a set timeframe.
Order
An investor’s instruction to a broker to buy or sell a security.
Original Interest Rate
The initial interest rate agreed upon for a loan or credit product, prior to any adjustments or changes.
Outstanding Shares
The total shares of a company’s stock that are currently owned by all shareholders, including insiders and institutional investors.
Overdraft
Occurs when money is withdrawn from a bank account and the available balance goes below zero.
P
Partnership
A business structure in which two or more individuals share ownership, profits, losses, and responsibilities.
Payout Ratio
The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of net income.
Penny Stock
A low-priced, speculative security typically trading below $5 per share, often associated with higher risk and lower liquidity.
Pension Plan
A retirement plan that provides a fixed income to employees after they retire, often funded by the employer.
Per Capita
A method of distributing assets or income equally among all individuals in a group.
Performance Fee
A fee paid to an investment manager based on the fund’s performance, often calculated as a percentage of profits earned.
Performance Stock Awards (PSAs)
Equity awards granted to employees based on achieving specified performance goals over a set period.
Performance Stock Units (PSUs)
Units granted to employees that convert into shares upon meeting predetermined performance criteria.
Permanent Life Insurance
A type of life insurance that provides lifelong coverage and typically includes a cash value component that grows over time.
Perpetuity
A financial instrument or cash flow that continues indefinitely.
Personal Identification Number (PIN)
A numeric password used to authenticate a user accessing electronic systems, such as ATM or debit cards.
Policyholder
The individual or entity who owns an insurance policy and is responsible for maintaining premium payments.
Policy Loan
A loan issued by an insurance company to a policyholder using the cash value of a permanent life insurance policy as collateral.
Policy Owner
The individual or entity that has ownership rights in an insurance policy, including the ability to make changes or access benefits.
Policy Rider
An optional addition to an insurance policy that provides extra benefits or modifies coverage under specific conditions.
Portfolio
A collection of investments like stocks, bonds, and real estate owned by an individual or institution.
Portfolio Diversification
An investment strategy that spreads risk by investing in a variety of assets to reduce exposure to any single security or sector.
Portfolio Manager
A professional responsible for making investment decisions and managing a portfolio of assets.
Portfolio Risk
The potential for losses in an investment portfolio due to market fluctuations or other factors.
Positive Cash Flow
When the amount of cash received exceeds the amount of cash paid out during a period.
Post-Tax
Refers to income, contributions, or earnings calculated after income taxes have been deducted. Post-tax contributions do not reduce current taxable income but may offer tax-free growth or withdrawals, such as contributions to a Roth IRA.
Power of Attorney
A legal document granting one person the authority to act on behalf of another in financial, legal, or medical matters.
Pre-Tax
Refers to income, contributions, or earnings calculated before income taxes are deducted. Pre-tax contributions reduce taxable income in the year they are made, such as contributions to a traditional 401(k) or health savings account.
Preferred Stock
A class of stock that provides shareholders with priority in dividend payments and asset distribution over common stockholders.
Prenuptial Agreement
A legal contract made between two individuals before marriage, outlining the ownership of assets and financial responsibilities in the event of divorce or death.
Premium
The price paid above the face value of a bond or insurance policy, or the cost of an option contract.
Preneed Planning
Pre-arranging and funding future services, such as funerals, to reduce future financial stress.
Present Value
The current value of a future sum of money or stream of cash flows, discounted at a specific interest rate.
Price-Earnings Ratio (P/E Ratio)
A valuation metric calculated by dividing a company’s current stock price by its earnings per share.
Prime Interest Rate
The interest rate commercial banks charge their most creditworthy customers, used as a benchmark for other loans.
Principal
The original amount of money invested or loaned, excluding interest or dividends.
Probate
The legal process of administering a deceased person’s estate, including validating the will, settling debts, and distributing assets.
Profit Margin
A measure of profitability calculated as net income divided by revenue, expressed as a percentage.
Profit-Sharing Plan
A retirement plan in which an employer contributes a portion of company profits to employee retirement accounts.
Property
Any tangible or intangible item that a person or entity owns, including real estate, investments, and personal belongings.
Prospectus
A legal document that provides details about an investment offering to potential investors.
Proxy
Authorization given by a shareholder to another party to vote on their behalf at a company’s shareholder meeting.
Q
Qualified Dividend
A dividend that meets specific IRS criteria to be taxed at the lower long-term capital gains rate rather than as ordinary income.
Qualified Retirement Plan
A retirement plan that meets IRS requirements and offers tax advantages to both employers and employees.
Qualified Stock Options
Also known as Incentive Stock Options (ISOs), these stock options qualify for favorable tax treatment under IRS rules if specific holding periods and other conditions are met.
Qualifying Widow(er)
A filing status for tax purposes that allows a widow or widower with a dependent child to use joint tax rates for up to two years after the spouse’s death.
Quarterly Report
A financial report issued by publicly traded companies every three months detailing financial performance and operations.
Quick Ratio
A liquidity metric that measures a company’s ability to meet short-term obligations with its most liquid assets, excluding inventory.
R
Rate
A measure or level of interest, return, or cost expressed as a percentage, commonly applied to loans, investments, or savings.
Rate of Return
The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s initial cost.
Real Estate Investment Trust (REIT)
A company that owns or finances income-producing real estate and allows investors to pool funds to invest in large-scale properties.
Real Rate of Return
The rate of return on an investment after adjusting for inflation.
Rebalancing
The process of realigning the proportions of assets in a portfolio to maintain a desired asset allocation.
Recognition Date
The date when an asset or liability is recorded in the financial statements.
Recourse Loan
A loan where the lender can seek repayment from the borrower’s other assets if the collateral does not fully cover the debt.
Redemption
The process of repaying or buying back a security before or at maturity.
Registered Investment Advisor (RIA)
A firm or individual registered with the SEC or state authorities that provides investment advice and manages portfolios.
Regulation D
A set of SEC rules governing private placement exemptions from registration for securities offerings.
Regulation E
A federal regulation that outlines the rights, responsibilities, and protections for consumers using electronic fund transfers.
Reinvestment Risk
The risk that future proceeds from investments will be reinvested at lower interest rates.
Required Minimum Distribution (RMD)
The minimum annual withdrawal required from certain retirement accounts once you reach a specific age.
Residual Income
The income that remains after all expenses and costs, including the cost of capital, have been deducted.
Restricted Stock Awards (RSAs)
A form of equity compensation typically granted to employees. RSAs are actual shares granted at the time of the award, subject to vesting schedules. They are designed to align employee interests with company performance. Employees usually receive voting rights and dividends immediately, but may forfeit shares if they leave before vesting.
Restricted Stock Units (RSUs)
A form of equity compensation typically granted to employees. RSUs represent a promise to deliver shares in the future once vesting requirements are met. They are designed to align employee interests with company performance. RSUs do not provide voting rights or dividends until the shares are issued after vesting.
Return on Equity (ROE)
A measure of a company’s profitability calculated by dividing net income by shareholders’ equity.
Return on Investment (ROI)
A measure used to evaluate the efficiency of an investment, calculated as net profit divided by the original investment cost.
Revenue
The total income generated from normal business operations.
Risk
The possibility of losing some or all of the original investment or not achieving the expected return.
Risk Tolerance
An investor’s ability and willingness to endure declines in the value of investments.
Rollover IRA
An individual retirement account that allows the transfer of funds from a qualified retirement plan, such as a 401(k), without incurring tax penalties.
Roth IRA
An individual retirement account funded with after-tax dollars, allowing for tax-free growth and withdrawals under certain conditions.
Roth IRA Conversion
The process of transferring funds from a traditional IRA to a Roth IRA, triggering a taxable event but allowing future tax-free withdrawals.
Revocable Trust
A trust that can be altered or revoked by the grantor during their lifetime, often used for estate planning to avoid probate.
Rollover
The transfer of assets from one retirement account to another without incurring taxes or penalties, typically within a specified time frame.
Roth IRA Conversion
The process of transferring funds from a traditional IRA or qualified retirement plan into a Roth IRA, often triggering a taxable event.
S
Savings Account
A deposit account at a financial institution that earns interest and allows limited withdrawals and transfers.
Savings Incentive Match Plan for Employees (SIMPLE)
A retirement plan for small businesses that allows both employer and employee contributions to traditional IRAs.
Security
A financial instrument representing ownership (stocks), creditor relationships (bonds), or rights to ownership (options), which can be traded in financial markets.
Securities
Financial instruments that represent ownership or creditor relationships, including stocks, bonds, and derivatives.
Securities and Exchange Commission (SEC)
The U.S. federal agency responsible for regulating securities markets and protecting investors.
Sector
A distinct part of the economy made up of businesses that operate in the same industry or market.
Seed Money
Initial funding used to start a new business or venture, often from the founders or early investors.
Self-Directed IRA
An individual retirement account where the account holder has control over investment decisions, including alternative assets.
Separate Account
An investment account maintained separately from an insurance company’s general assets, often used in variable insurance products.
Share
A unit of ownership in a corporation or financial asset.
Shareholder
An individual or entity that owns shares in a corporation.
Short Selling
The practice of selling borrowed securities with the expectation of buying them back at a lower price to profit from a decline.
Simple Interest
Interest calculated only on the principal amount of a loan or investment.
Small Business
An independently owned and operated company with a limited number of employees and revenue.
Social Security
A federal program that provides retirement, disability, and survivor benefits funded through payroll taxes.
Split-Dollar Life Insurance
An arrangement in which the cost and benefits of a life insurance policy are shared between two parties, usually an employer and employee.
Split-Dollar Plan
A type of agreement detailing how the premium payments, cash value, and death benefit of a life insurance policy are divided between parties.
Spousal IRA
An individual retirement account set up for a non-working or low-earning spouse, funded by the working spouse’s income.
Spread
The difference between the bid and ask price of a security or between yields on different investments.
Standard & Poor’s 500 Index (S&P 500)
A market index that tracks the performance of 500 of the largest publicly traded companies in the U.S., often used as a benchmark for the overall stock market.
Standard Deviation
A statistical measure of the dispersion or variability of a set of values, often used to assess investment risk.
Statement of Cash Flows
A financial statement that shows the cash inflows and outflows of a company over a period.
Stock
Ownership shares in a publicly traded company. A security representing ownership in a corporation and a claim on part of its assets and earnings.
Stock Appreciation Rights (SARs)
A form of equity compensation granting employees the right to receive the increase in stock price over a set period, paid in cash or shares, without requiring stock purchase.
Stock Certificate
A physical or electronic document that serves as proof of ownership of shares in a corporation.
Stock Dividend
A dividend paid in the form of additional shares rather than cash.
Stock Exchange
A marketplace where securities are bought and sold.
Stock Option
A contract giving the holder the right, but not the obligation, to buy or sell shares of stock at a specified price within a set timeframe.
Stock Purchase Plan
A program that allows employees to buy company stock, often at a discount and through payroll deductions.
Stock Slices
Partial shares of stock purchased, allowing investors to buy a fraction of a full share.
Stock Split
An increase in the number of shares outstanding by issuing more shares to current shareholders, reducing the price per share.
Stock Ticker
A unique series of letters assigned to a publicly traded company’s stock for identification on stock exchanges.
Stop-Loss Order
An order placed with a broker to sell a security when it reaches a specified price to limit losses.
Strike Price
The predetermined price at which a stock option holder can buy (call) or sell (put) the underlying stock.
Succession Planning
A strategy for passing leadership roles or ownership of a business to someone else.
T
Tax Credit
An amount that taxpayers can subtract directly from the taxes they owe to reduce their tax liability.
Tax Deduction
An expense that can be subtracted from gross income to reduce taxable income.
Tax-Deferred
Earnings on an investment that are not taxed until the investor withdraws the funds.
Tax-Exempt Bonds
Bonds issued by government entities whose interest income is exempt from federal income taxes, and sometimes state and local taxes.
Tax-Loss Harvesting
A strategy of selling securities at a loss to offset capital gains taxes and reduce taxable income.
Tax Forms
Official documents issued by tax authorities, such as the IRS, used by individuals, businesses, and other entities to report financial information, calculate tax liabilities, claim deductions or credits, and fulfill tax filing requirements(See “Forms” under F for detailed descriptions).
Tax Planning
Structuring your finances to minimize tax liabilities and maximize after-tax income.
Taxable Income
The portion of income subject to taxation after deductions and exemptions.
Technical Analysis
A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume.
Tenancy in Common
A form of property ownership where two or more individuals hold undivided interests with no right of survivorship.
Term
The length of time until a financial contract, such as a bond or loan, matures.
Term Insurance
A life insurance policy that provides coverage for a specified period or term.
Testamentary Trust
A trust created through a will that becomes effective upon the death of the grantor.
Thematic Investing
An investment approach focusing on long-term trends or themes, such as technology innovation, environmental sustainability, or demographic shifts.
Ticker Symbol
A short code used to uniquely identify publicly traded shares of a company on stock exchanges.
Time Horizon
The expected time period over which an investment is intended to be held before being liquidated.
Title
Legal ownership of property or assets.
Title Insurance
Insurance that protects against losses from defects or disputes over ownership of real estate.
Total Return
The overall return on an investment, including income and capital gains.
Trade Date
The date on which a trade is executed.
Trading Volume
The number of shares or contracts traded in a security or market during a given period.
Traditional IRA
An individual retirement account allowing tax-deductible contributions with tax-deferred growth, subject to required minimum distributions at a certain age.
Transfer
The movement of assets from one account or individual to another, such as between financial institutions or ownership titles.
Travelers Check
A pre-printed, fixed-amount check designed for travelers, used as a safe alternative to cash and accepted internationally.
Treasuries
U.S. government debt securities including Treasury bills, notes, and bonds.
Treasury Bill (T-Bill)
A short-term government debt security with maturity of one year or less, sold at a discount from face value.
Treasury Bond
A long-term government debt security with a fixed interest rate and maturity of more than ten years.
Treasury Note
A government debt security with a fixed interest rate and maturity between one and ten years.
Trust
A legal arrangement where one party holds assets for the benefit of another.
Trustee
An individual or institution appointed to manage and administer a trust’s assets on behalf of beneficiaries.
Trustee-to-Trustee Transfer
The direct transfer of assets from one retirement plan trustee to another to avoid taxes or penalties.
U
Umbrella Policy
Extra liability insurance that goes beyond the limits of your other policies.
Underwater
A term describing stock options whose exercise price is higher than the current market price, making them temporarily worthless.
Underwriting
The process insurers use to assess the risk of insuring a person or asset. By which an individual or institution evaluates and assumes the risk of a financial transaction, such as issuing securities or insurance.
Unfunded Liability
A financial obligation for which no money has been set aside or reserved.
Unsecured Loan
A loan that is not backed by collateral, relying on the borrower’s creditworthiness.
Unvested Grant
An equity award or option that has not yet met the vesting criteria and cannot be exercised or sold.
Upside Risk
The potential for an investment’s value to increase beyond expectations.
U.S. Treasury Securities
Debt instruments issued by the U.S. Department of the Treasury to finance government operations, including Treasury bills, notes, and bonds.
Uniform Gift to Minors Act (UGMA)
A law that allows minors to receive gifts and custodial property without the need for a formal trust, with an adult custodian managing the assets until the minor reaches adulthood.
Unlimited Marital Deduction
A tax provision that allows an unlimited transfer of assets between spouses at any time without incurring federal estate or gift taxes.
Universal Life Insurance
A type of permanent life insurance that offers flexible premiums and adjustable death benefits, combining life coverage with a savings component.
V
Variable Annuity
An insurance contract that provides periodic payments to the holder, where the payout amount varies based on the performance of underlying investments.
Variable Interest Rate
An interest rate on a loan or security that fluctuates over time based on a benchmark rate or index.
Variable Life Insurance
A type of permanent life insurance that combines a death benefit with a separate investment account, allowing cash value and death benefit to fluctuate based on investment performance.
Variable Universal Life Insurance
A type of permanent life insurance combining investment options, flexible premiums, and a death benefit, with returns dependent on market performance.
Vest/Vesting
The process by which an employee earns the right to own or exercise equity awards over time, according to a predetermined schedule.
Vested Grant
An equity award or option that has met all conditions and is fully owned by the employee.
Vested Interest
The process by which a person earns the right to employer-provided benefits over time. The non-forfeitable right to receive benefits from a retirement plan or other financial asset.
Vesting Period
The length of time over which vesting occurs for equity awards.
Vesting Schedule
A timetable that outlines when equity awards become vested and owned by the employee.
Volatility
A statistical measure of the dispersion of returns for a given security or market index, often used as an indicator of risk.
Volume
The number of shares or contracts traded in a security or market during a given period.
W
W-2
A tax form issued by employers to employees summarizing annual wages earned and taxes withheld, used to file federal and state income tax returns.
W-4
A tax form completed by employees in the United States to indicate their tax situation to employers, determining the amount of federal income tax to withhold from their paychecks.
W-9
A tax form used to provide a taxpayer identification number to entities required to report income paid.
Waiver
A voluntary relinquishment or surrender of a known right or claim.
Walkaway Clause
A contract provision allowing a party to withdraw from an agreement without penalty under specified conditions.
Wall Street
The financial district in New York City known as the hub of the U.S. securities industry and financial markets.
Wash Sale
A sale of a security at a loss followed by the purchase of the same or a substantially identical security within 30 days before or after the sale, disallowing the loss for tax purposes.
Wealth Management
A professional service combining financial planning and investment management to address the needs of affluent clients.
Will
A legal document that outlines how a person’s assets will be distributed after death.
Withdrawal
The act of taking money out of an account or investment.
Withholding Tax
An amount withheld from an employee’s paycheck and paid directly to the government as partial payment of income tax.
Wire Transfer
An electronic transfer of funds from one bank account to another, typically used for fast and secure payments.
X
X-Efficiency
A measure of how well a company uses its resources compared to the optimal or most efficient use.
Y
Year-End Statement
A summary document outlining all account activity for the calendar year.
Yield
The income return on an investment, typically expressed as an annual percentage based on the investment’s cost, current market value, or face value.
Yield Curve
A graph that plots the interest rates of bonds having equal credit quality but differing maturity dates, often used to predict changes in economic output and growth.
Yield to Maturity (YTM)
The total return anticipated on a bond if held until it matures, expressed as an annual rate.
Z
Zero Coupon Bond
A bond that does not pay periodic interest but is issued at a discount to its face value and repaid at full face value at maturity.
Zero-Based Budgeting
A budgeting method where every expense must be justified for each new period, starting from a “zero base.”
Zero-Sum Game
A situation in investing or economics where one party’s gain is exactly balanced by another party’s loss.
Zoning
Local government regulations that dictate how property can be used or developed.
All Calculators
Savings and Investment
Retirement
Our Trusted Partners & Carriers
Disclosure
The information provided on this page is intended solely as a resource to assist individuals in accessing helpful tools, websites, and third-party content related to financial and government services. This information is offered strictly as a courtesy. By clicking any of the links provided, you will be leaving this website and accessing external sites. Diamond Financial Group, Inc. does not endorse, guarantee, or take responsibility for the accuracy, completeness, or reliability of any external websites or content linked from this page. We are not liable for any direct or indirect technical or system issues, or any consequences arising from your use of third-party technologies, websites, information, or programs made available through these links. Use of these resources is at your own discretion and risk, and you assume full responsibility for your interactions with linked websites.
