Personal Finance Economics Vocabulary – Flashcards
Flashcard maker : Daniel Thompson
Personal Finance
Use of the principles and techniques of corporate finance in an individual’s money affairs.
Saving
Portion of disposable income not spent on consumption of consumer goods.
Incentives
Reward or motivational device for a desired action or behavior.
Investment
Money committed or property acquired for future income.
Financial Institutions
Channel between savers and borrowers of funds.
Investors
Neither a speculator nor a gambler but one whose primary objectives are preservation of the original investment.
Interest Earned
Average amount of interest earned on an insurer’s investments.
Risk
Probability that an actual return on an investment will be lower than the expected return.
Return
Formally or officially report on a specific matter.
Progressive
Dynamic and forward looking.
Regressive
Predisposition that something will revert back to a previous lower state.
Proportional
Part or share corresponding to other parts or share of a whole divided according to a formula or rule.
Credit
Purchasing power created by banks through lending based on fractional reserve system.
Simple Interest
Interest computed only on the principle and not on principle plus interest earned in previous periods.
Compound Interest
Interest computed on the principle amount to which interest earned to-date has been added.
Insurance
Risk-transfer mechanism that insures full or partial compensation for the loss or damage caused by events beyond control of the insured party.
Deductible
Fixed amount or percentage of an insurance claim that is the responsibility of the insured.
Asset Production
Safeguarding one’s wealth against those who may have claims against it.
Spending
Pay out in buying or hiring goods or services.
Interest Charged
Amount of ownership a stockholder has in a company, usually expressed as a percentage.
Stocks
Goods or merchandise kept on the premises of a business or warehouse and available for sale or distribution.
Bonds
Agreement with legal force.
Mutual Funds
Investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities.
Credit Worthiness
Asset of the likelihood that a borrower will default to his or her debt obligations.
Risk-Management
Provides a structured and coherent approach to identifying, assessing and managing risk.
Premiums
Amount to be paid for an insurance policy.
Shared Liability
Two or more investors invest in a property together.
Savers
Person who regularly saves money through a bank or recognized scheme.
