Students will understand savings, investing, and retirement planning.
Annual Report |
Audited document required by the SEC and sent to a public company’s or mutual fund's shareholders at the end of each fiscal year, reporting the financial results for the year (including the balance sheet, income statement, cash flow statement and description of company operations) and commenting on the outlook for the future. |
Asset |
Any items of value that people own, including cash, property, personal possessions, and investments. |
Bond |
A certificate of debt that is issued by a government or corporation in order to raise money with a promise to pay a specified sum of money at a fixed time in the future and carrying interest at a fixed rate. |
| Broker | An individual or firm who acts as an intermediary between a buyer and seller, usually charging a commission. For securities and most other products, a license is required. |
| Certificate of Deposit (CD) | A savings alternative in which money is left on a stated time period (ranging from a month to five or more years) to earn a specific rate of return. |
| Compound Interest | Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. |
| Diversification | The process of spreading one’s assets among several different types of investments in order to reduce risk. |
| Inflation | The general rise in the level of prices for goods and services over time. |
| Investing | An item of value purchased for income or capital appreciation. |
| Liquidity | The ability to easily convert financial resources into cash without a loss of value. |
| Money Market | A savings account in which the interest rate varies as market rates change. |
| Mutual Fund | An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. |
| Prospectus | A document that discloses information about a company’s earnings, it’s assets and liabilities, it’s products or services, and the qualifications of it’s management. A report that provides potential investors with detailed information about a particular mutual fund. |
| Real Estate | A piece of land, including the air above it and the ground below it, and any buildings or structures on it. |
| Retirement Planning | Act of creating a financial plan for life after retirement from compensated work. |
| Return | The annual return on an investment, expressed as a percentage of the total amount invested. |
| Risk | Chance of loss. |
| Risk-return | The relation between risk and return in which one must be willing to accept greater risk if one wants to pursue greater returns. |
| Savings | The part of a person's income that is not spent. |
| Savings Account | A deposit at a bank or savings and loan that pays interest, but cannot be withdrawn in check writing. |
| Security Exchange Commission (SEC) | Securities and Exchange Commission. The primary federal regulatory agency for the securities industry, whose responsibility is to promote full disclosure and to protect investors against fraudulent and manipulative practices in the securities markets. |
| Simple Interest | The interest calculated on a principal sum, not compounded on earned interest. |
| Social Security | The comprehensive federal program of benefits providing workers and their dependents with retirement income, disability income, and other payments. The Social security tax is used to pay for the program. |
| Stock | An instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits. |
| Tax Sheltered Annuity (TSA) | A contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement. |
| Time Value of Money | The increase in an amount of money as a result of dividends or interest earned. The idea that a dollar now is worth more than dollar in the future, even after adjusting for inflation, because a dollar now can earn interest or other appreciation until the time the dollar in the future would be received. |
| Treasury Bill (T-Bill) | A negotiable debt obligation issued by the U.S. government and backed by its full faith and credit, having a maturity of one year or less. Exempt from state and local taxes. |
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