Personal Finance

Traditional (Individual Retirement Account) IRA Individual Retirement Account – A personal qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount each year, depending on the person’s tax bracket.
Roth (Individual Retirement Account) IRA Private retirement plan that taxes income before it is saved, but which does not tax interest on that income when funds are used upon retirement
Owners equity The amount remaining after the value of all liabilities is subtracted from the value of all assets.
How much is a corporation worth? The value of a company is equal to the PV of future cash they can produce.
Mutual fund A pool of money from many investors that is used to buy different stocks and bonds.
Bond It is a contact between a lender and borrower. Certificate issued by a government or company promising to pay back a borrowed sum with interest.When you buy a ____ , you are loaning money to an organization. Specifies due date, amount to be paid, and interest.
Treasury inflation protected bond
U.S. Treasury bonds No state tax, only pay federal tax.Bonds used to fund national debt.
Municipal bond No state or fed tax if issued in the state you reside.A bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks, and schools
Corporate bonds Interest earned taxed by both state and federal governments.Bonds issued by corporations
Primary market Market in which only the original issuer can sell or repurchase a financial asset.
Secondary market Market in which investors trade between themselves.
Stock A certificate of ownership in a corporation
Preferred stock Get dividends.
Common stock Might not get dividends.
Dividend Salary paid by corporations to shareholders.
Beta Measures responsiveness of stock to change in overall market.A Slope of a line showing relationship between returns on a stock and the S&P 500.
Listing agent Seller’s agent who represents seller and has agreement to protect sellers interest.
Buyer’s agent Works for best interest of buyer.
Teaser rate Low for only short period then adjusted upward.
negative amortization
Predatory lending Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.
Subprime mortgage a mortgage made by lenders who charge higher than prime rates to borrowers who have poor or no credit ratings
Affordable care act Health plans cannot limit or deny benefits or coverage because someone has a pre-existing condition. Diabetes, heart disease, cancer..etc.
Health maintenance organization Limited to their doctors.Low cost.
Preferred provider organization Not limited to their doctors.Higher cost.
Gov sponsored health care:State plans Provide for work-related accidents and illness.
Gov sponsored health care:Federal plans Medicare, medicaid.
Long term care insurance Services to help individuals carry out essential activities of daily living.
Money market fund Invest in securities with a very short time to maturity and high credit quality
Index fund Mutual funds that attempt to mirror the movement of an existing stock/bond index.A mutual fund that was designed to reduce fees by investing in the stocks and bonds that make up an index
Open end fund a mutual fund with an unlimited number of shares that are issued and redeemed by an investment company at the investor’s request

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