ASUE
Custom of clubbing together a number of persons for monetary aid. A fixed sum agreed upon is given by each at a fixed time (usually every week) and place, under a president; the total amount is paid over to each member in rotation.
ANNUAL PERCENTAGE RATE (APR)
APR allows you to evaluate the cost of the loan in terms of a percentage. If your loan has a 10% rate, you will pay $10 per $100 you borrow annually.
ANNUAL PERCENTAGE YIELD
The effective, or true, annual rate of return. The APY is the rate actually earned or paid in one year, taking into account the effect of compounding.
BAHAMAS DEPOSITORY RECEIPT (BDR)
A negotiable financial instrument issued by a bank to represent a foreign company's publicly traded securities. EG: Emera Inc.
BANK
A for-profit company that is owned by its stockholders and provides saving and checking accounts and other financial services to its customers.
BENEFICIARY
A beneficiary is the person or organization who receives assets that are held in your name in a retirement plan, or are paid on your behalf by an insurance company, after your death.
BROKER DEALERS
A person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers.
BONDS
Loans to corporations or to the government for a certain period, called a term. You earn interest on your loan investment, and at the end of the term, your bond matures and can be repaid to you by the company.
CAPITAL
Capital is money that is used to generate income or make an investment.
CAPITAL GAIN/LOSS
When you sell an asset at a higher (lower) price than you paid for it.
CAPITALIZATION OF INTEREST
Capitalizing interest means adding unpaid, accumulated interest to the principal balance of your loan. Capitalization increases the total cost of your loan. If you choose to let your interest be capitalized, you repay more money in total than if you pay the interest while you are in school. Whichever option you choose, you are responsible for paying the full amount of all interest on the loan.
CASH FLOW
Money coming into your accounts and the money you are spending over a specific period.
CASH VALUE
Cash value is the amount that an account is worth at any given time.
CERTIFICATE OF DEPOSIT (CD)
An account in which you deposit funds for a set term (e.g., six months or one, two, or five years), with a financial institution, with the promise of a set interest rate. For most CDs, you cannot make deposits or withdrawals to the account during this term.
CHECKING ACCOUNT
Checking accounts are transaction accounts that allow you to authorize the transfer of money to another person or organization either by writing a check that includes the words "Pay to the order of" or by making an electronic transfer.
CLOSING COSTS
Expenses paid to finalize a transaction over and above the cost of property/real estate.
COMPOUND INTEREST
Interest added to the principal sum of a loan or deposit.
COST OF GOODS SOLD
The direct attributable costs of products or services sold.
CREDIT UNION
A financial institution owned by its members that provides savings and checking accounts and other services to its membership at low fees.
CRYPTOCURRENCY
A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
DEPOSIT
A sum of money paid into a bank or building society account.
DISCLOSURE
A document explaining how a financial product or offering works. It also details the terms to which you must agree in order to buy it or use it, and, in some cases, the risks you assume in making such a purchase.
DIVERSIFICATION
The act of spreading the risk of loss over a variety of savings and investment options.
DIVIDEND
A payment made per share to a company’s shareholders by a company.
FACE VALUE
The amount paid to the bondholder at the maturity date, given the issuer does not default.
FAIR MARKET VALUE
The price you would have to pay to buy a particular asset or service on the open market.
FIXED DEPOSIT ACCOUNT
A financial instrument provided by banks, which provides customers a higher rate of interest than a regular savings account, until the given maturity date.
GAMBLING
To stake or risk money, or anything of value, on the outcome of something involving chance.
GROSS INCOME
The total amount of income from wages before any payroll deductions.
MONEY MARKET ACCOUNT
An account that usually pays a higher rate of interest, and it usually requires a higher minimum balance to earn interest than a regular savings account does. You can make deposits and withdrawals.
IDENTITY THEFT
Identity theft is the unauthorized use of your personal information, such as your name, address, National Insurance number, or credit account information.
INCOME
Any money an individual receives.
INTEREST
Interest is the additional amount you will pay to a lending institution to borrow money. In terms of savings, interest is the additional amount you will earn for having your money in a bank account or other savings vehicle.
INITIAL PUBLIC OFFERING (IPO)
The first sale of privately owned equity (stock or shares) in a company via the issue of shares to the public and other investing institutions. In other words, an IPO is the first sale of stock by a private company to the public.
LEASE
A legal agreement that provides for the use of something, typically real estate or equipment in exchange for payment. A lease is usually legally binding, which means you are held to its terms until it expires. If you break a lease, you could be held liable in court.
MUTUAL FUND
A professionally managed collection of money from a group of investors. A mutual fund manager invests your money in some combination of various stocks, bonds, and other products.
Option
The right to buy or sell a specific financial instrument at a specific price, called the strike price, during a preset period.
Portfolio
When one owns more than one security. A portfolio is built by buying additional stock, bonds, annuities, mutual funds, or other investments.
PREFERENCE SHARE
Shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued. If the company enters bankruptcy, the shareholders with preferred stock are entitled to be paid from company assets first.
PRICE-TO-EARNINGS RATIO (P/E)
The relationship between a company's share price and its earnings. It is calculated by dividing the current price per share by the earnings per share.
PRINCIPAL
An amount of money you invest, the face amount of a bond, or the balance you owe on a debt, distinct from the added interest on a loan.
PROSPECTUS
A formal legal document that is required by and filed with the Securities Commission (SEC) that provides details about an investment offering for sale to the public.
PYRAMID SCHEME
A business model that enrolls participants via a promise of payments or services for recruiting other participants into the scheme rather than supplying investments or sale of products of services.
Rate of return
Income you collect on an investment expressed as a percentage of the investment's purchase price.
Savings account
A deposit account in a bank or credit union that pays interest on your balance. Some institutions require that you have at least a minimum amount in the account to qualify for earnings.
Stocks
A unit of ownership within a company. The more stocks owned, the higher percentage of ownership. If the company does well, you might receive periodic dividends based on the number of shares you own. Dividends are part of a company’s profits that it gives back to you, the shareholder.
Time value of money
Money's potential to grow in value over time. Money that is available in the present may be considered more valuable than the same amount in the future.
Trust
A legal entity through which a trustee holds title to assets on behalf of a beneficiary or beneficiaries. The trustee has a legal monetary obligation to manage the assets in the best interests of the beneficiary and distribute those assets according to the instructions provided in the trust document, or agreement, that established the trust.
