1. Financial Statements:
Balance Sheet: A snapshot of assets, liabilities, and equity at a specific point in time.
Income Statement (Profit and Loss): Shows revenue, expenses, and profits/losses over a period.
Cash Flow Statement: Tracks cash inflows and outflows in a business over a period.
Cash: Physical currency or its equivalent in bank accounts.
Accounts Receivable: Money owed to a company for goods or services sold on credit.
Investments: Financial assets such as stocks, bonds, and mutual funds.
Real Estate: Property or land owned by an individual or business.
Accounts Payable: Debts owed by a business to its suppliers or vendors.
Loans: Borrowed money that must be repaid, often with interest.
Mortgages: Loans used to purchase real estate, secured by the property itself.
Credit Card Debt: Unpaid balances on credit card accounts.
Tax Deduction: Expenses that reduce taxable income, lowering tax liability.
Tax Credit: Direct reduction in taxes owed based on specific criteria.
Taxable Income: Total income subject to taxation after deductions and exemptions.
Budget: Financial plan detailing expected income and expenses over a period.
Fixed Expenses: Costs that remain constant, like rent or mortgage payments.
Variable Expenses: Costs that fluctuate, such as groceries and utilities.
6. Retirement Planning:
401(k) Plan: Employer-sponsored retirement savings plan with tax advantages.
Individual Retirement Account (IRA): Personal retirement savings account with tax benefits.
Pension Plan: Employer-funded retirement plan that provides regular income.
Mutual Funds: Investment funds pooling money from multiple investors to diversify holdings.
Stocks: Ownership shares in a company, representing a portion of its assets and earnings.
Bonds: Debt securities issued by governments or corporations, paying fixed interest.
Life Insurance: Policy providing financial protection for beneficiaries after the insured’s death.
Health Insurance: Coverage for medical expenses and healthcare services.
Property Insurance: Protects property against damage or loss, such as home or auto insurance.
Checking Account: Bank account for everyday transactions and payments.
Savings Account: Account earning interest on deposited money.
Certificate of Deposit (CD): Time deposit with a fixed term and interest rate.
10. Debt Management:
Debt Consolidation: Combining multiple debts into a single loan for easier repayment.
Debt Snowball: Repaying debts starting with the smallest balances first.
11. Risk Management:
Diversification: Spreading investments across various assets to reduce risk.
Hedging: Using financial instruments to mitigate potential losses from investments.
12. Credit Score:
FICO Score: Standard credit score used by lenders to assess creditworthiness.
Credit Report: Summary of an individual’s credit history, used to calculate credit scores.
Inflation Rate: Percentage increase in the general price level of goods and services over time.
Purchasing Power: The value of money in terms of the goods and services it can buy.
14. Financial Planning:
Estate Planning: Preparing for the distribution of assets after an individual’s death.
Financial Advisor: Professional providing advice on financial matters and investment strategies.
15. Capital Gains:
Capital Gain Tax: Tax on profits earned from selling assets like stocks or real estate.