Step 2 of 5
Glossary
- Asset
- Something you own that has value, like cash, property or investments.
- Beneficiary
- The person who receives insurance proceeds or an account when you pass away.
- Cash flow
- Money coming in minus money going out over a period.
- Compounding
- Earning returns on your past returns, so growth speeds up over time.
- Diversification
- Spreading money across different investments to lower risk.
- Dividend
- A share of profits paid to investors or members.
- Emergency fund
- Cash set aside for unexpected, urgent expenses.
- Face amount
- The amount a life insurance policy pays when the insured dies.
- Gross pay
- Your salary before deductions.
- HMO
- A health plan that pays partner hospitals and doctors directly, up to a limit.
- Inflation
- The rise in prices over time, which lowers what money can buy.
- Liability
- Money you owe, like loans and credit card balances.
- Liquidity
- How quickly you can turn something into cash without losing value.
- Net worth
- Your total assets minus your total liabilities.
- Peso-cost averaging
- Investing a fixed amount regularly, no matter the price.
- Premium
- What you pay for insurance coverage.
- Risk appetite
- How comfortable you are with your investments going up and down.
- Sinking fund
- Money saved monthly for a known future cost.
- Take-home pay
- What you receive after taxes and contributions.
- Term life insurance
- Pure life coverage for a set period, with no cash value.