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Financial Glossary
Sub title
AFTER-TAX RETURN
The yield of
an investment after taxes have been taken out.
ANNUITY
An individual
pays an insurance company a specified capital sum in exchange for a promise
that the insurer will, at some time in the future, begin to make a series
of periodic payments to the individual for as long as he/she lives or
for some other specified period of time.
APPRECIATION
An increase in fair market value.
ASSETS
Everything a person owns, including cash, investments, accounts receivable, real property, and autos.
BALANCE SHEET
A condensed financial statement showing the amount and nature of an individual's assets and liabilities at a given time. A "snapshot" of what a person owns and what he owes. Sometimes referred to as net worth statement.
BASIS
The price paid for an asset. Used to figure capital gains tax.
BENEFICIARY
One who is designated to receive a benefit. Example: person who would receive the proceeds of a life insurance settlement.
BID AND ASKED
The "bid" is the highest price anyone is willing to pay for a security at a given time; the "asked" is the lowest price anyone will take at that time. Stocks are usually purchased at "bid" and sold at "asked."
BOND
A promise of
a corporation, municipality, government, church, and the like, to pay
interest at a stated rate and repay face value of the bond
(which is actually a loan from you to the corporation or other entity)
at a
specified maturity date.
BUDGET
A plan or guideline for spending.
CAPITAL GAIN
Profit or loss
from the sale of a capital asset such as real estate, stock, commercial
property, land, or equipment. Any capital asset held at least one year
is classified as long-term and may receive favorable income
tax treatment.
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