# Financial Literacy

### 46 terms by nova77

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### Financial opportunity

An opportunity to make money

### Rate of return

The return on an investor's capital. Also called Yield. Expressed in a percentage

### Investment

money that is invested with an expectation of profit

### Revenue

The total amount of money made.

### Net income

Also called profit. Calculated as the Revenue - Expenses

### Budget

A plan of incoming and outgoing monies. Expense and Income.

### Expenses

an expense is an outflow of money to another person or group to pay for an item or service, or for a category of costs.

### Net Worth

The difference between your total assets and total liabilities

### Income Statement

a financial document that shows how much money (revenues) came in and how much money (expenses) was paid out

### Principal

The money originally invested or loaned, on which basis interest and returns are calculated

### Interest

a fixed charge for borrowing money; usually a percentage of the amount borrowed; "how much interest do you pay on your mortgage?"

### Simple interest

interest paid on the principal alone

### Compound interest

interest calculated on both the principal and the accrued interest

### Credit rating

an estimate, based on previous dealings, of a person's or an organization's ability to fulfill their financial commitments

### APR

Annual Percentage Rate

### APY

Annual Percentage Yield

### Yield

The rate of return received for one whole year, including the compound interest.

### CD

Certificate of Deposit

### FDIC

Federal Deposit Insurance Corporation

### Bankruptcy

A legal determination that an individual or corporation is unable to pay debts.

### Expenditures

Act of expending or paying out; An amount expended; an expense; an outlay

### Credit Card

A plastic card issued by a bank authorizing payment for purchases. Interest is charged on the outstanding balance.

### Mortgage

An agreement to repay a loan with interest over a certain period by the owner of a property to the mortgagee.

### Default

nonpayment: loss resulting from failure of a debt to be paid

### Parent Company

A company that owns a majority interest in another company (subsidiary) and controls management and operations of that subsidiary.

### divergent thinking

a type of thinking that is associated with creativity - seeing lots of solutions to a problem

### Return on Investment

return on invested capital: (corporate finance) the amount, expressed as a percentage, that is earned on a company's total capital calculated by dividing the total capital into earnings before interest, taxes, or dividends are paid

### Percentage Gain

loss or profit on an investment, expressed in a percent

### Amortization

the reduction of the value of an asset by prorating its cost over a period of years

### Amortization Schedule

a table detailing each periodic payment on an amortizing loan (typically a mortgage), as generated by an amortization calculator.

### Down Payment

a partial payment made at the time of purchase; the balance to be paid later

### Equity

the part of a house that you own, what you have paid for

### Foreclosure

the proceeding, by a creditor, to regain property or other collateral following a default on mortgage payments

### Condominium

a building in which each unit is owned by an individual but the grounds

### Real Estate

real property: property consisting of houses and land

### Ethical Investment

describes an investment strategy which seeks to maximize both financial return and social good

### Affluenza

always trying to keep up with the next guy material wise

### Consumerism

the act of consuming

### Consumption

burning through resources because of consumption

### Start-up expenses

when starting a new business, the expenses to start

### Profit & Loss statement

statement that shows profit or loss

### Balance sheet

assets, liabilities and equity as of a specific date

### Cash flow sheet

shows where all the money is going, entering and leaving

### Dividend

that part of the earnings of a corporation that is distributed to its shareholders

### Commodity

anything that can be traded (gold, wheat, stocks, etc0

### brent crude oil

is the biggest of the many major classifications of oil consisting of Brent Crude

Example: