Glossary
401K - A qualified retirement plan which allows workers to save for retirement. Money contributed and earnings are tax-deferred until withdrawn.
403B - A tax-advantaged retirement savings plan available for public education organizations and 501(c)(3) non profit organizations. Money contributed and earnings are tax-deferred until withdrawn.
annuity - A recurring periodic series of payments over a specific period of time.
asset - Any item of economic value that could be converted to cash, such as cash, securities, real estate, etc.
asset allocation- A key concept in financial planning.
annuity - A recurring periodic series of payments.
benefit - A payment or entitlement, such as one made under an insurance policy or employment agreement, or public assistance program. Or, more generally, something of value or usefulness.
bond - Bonds are debt and are issued for a period of more than one year. The US government, local governments, water districts, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically.
budget - A detailed pro forma schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget.
budget counseling - Education in developing and balancing your budget.
C Corporation - C corporations are taxed under the Federal income tax laws and most major companies are treated as C corporations for federal tax purposes.
cash flow analysis - The study of the cycle of your business' cash inflows and outflows, with the purpose of maintaining an adequate cash flow for your business, and to provide the basis for cash flow management.
Certificate of Enrollment - A certificate of enrollment is an official paper denoting a specific enrollment.
Certified Financial Planner - A person who has passed examinations accredited by the Certified Financial Planner Board of Standards, showing that the person is able to manage a client's banking, estate, insurance, investment, and tax affairs.
charitable giving - Charitable Giving can take many forms, among them: sponsorship of local charitable events, donations of excess goods, and philanthropy in one or more areas through the establishment of a foundation or council.
charity - An institution, organization, or fund established to help the needy.
college funding - The various assistance methods to pay for college such as scholarships, grants, and loans.
college planning - Preparing a set of decisions for college completion.
compliance - The state of being in accordance with the relevant Federal or regional authorities and their requirements.
comprehensive financial plans - Analysis of your assets and liabilities, income and expenses, insurance and estate plans considered with respect to your goals and risk tolerance.
debt - Money borrowed.
disability insurance - An insurance policy that insures a worker in the event of an occupational mishap resulting in disability. Insurance benefits compensate the injured worker for lost pay.
diversification annuity - An annuity designed to diversify your portfolio.
EA - An Enrolled Agent (or EA) is a tax professional recognized by the United States federal government to represent taxpayers in dealings with the Internal Revenue Service.
education funding - The various assistance methods to pay for education such as scholarships, grants, and loans.
education planning - Preparing a set of decisions for educational actions in the future.
EE bonds - A Savings Bond issued at a discount from par par with a fixed rate of interest, set at the time of purchase.
employee benefits - Various non-wage compensations provided to employees in addition to their normal wages or salaries.
employees - A person employed for wages or salary, esp. at nonexecutive level
enrolled - Officially registered as a member of an institution or a student on a course.
Enrolled Agent - A tax law specialist who passes a Treasury Department tax exam in order to become certified in advising and representing individuals when interacting with the IRS. Enrolled agents can make claims against the government on behalf of taxpayers.
estate - All assets owned by an individual at death, to be distributed according to the individual's will (or a court ruling if there is no will).
estate planning - The preparation of a plan to carry out an individual's wishes as to the administration and disposition of his/her property before or after his/her death.
ETF - Exchange Traded Funds (ETFs) are a basket of securities like a mutual fund, but they trade like a stock on an exchange.
fee only financial planning - A fee only planner is compensated by fees paid by clients, not commissions, referral fees, or other reimbursements based on sales of products or services.
fiduciary - One who must act for the benefit of another party.
financial advice - investment recommendations.
financial checkup - A review of your finances from a professional. Helps detect problems before they become a situation that require attention.
financial goals - A list of financial milestones you wish to complete in the future.
Financial Planning Association - A leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning.
fiscal policy - Government spending and taxing for the specific purpose of stabilizing the economy.
fixed annuity; - An annuity with fixed payments
Garrett Planning Network - The Garrett Planning Network is an international network of fee-only financial advisors and planners.
I bonds - A low risk savings instrument which earns interest while you own the bond at the same time protecting you from inflation. I bonds are issued by the U.S. Treasury.
income tax - A state or federal government's levy on individuals as personal income tax and on the earnings of corporations as corporate income tax.
insurance planning - Planning your insurance to maximize your protection against the risk of unexpected financial losses.
Internal Revenue Service - The federal agency responsible for the collection of federal taxes, including personal and corporate income taxes, Social Security taxes, and excise and gift taxes.
investment - The creation of more money through the use of capital.
IRA - A retirement account that may be established by an employed person. IRA contributions are tax deductible according to certain guidelines, and the gains in the account are tax-deferred.
medical insurance - Insurance which pays the cost of medical treatment, especially when someone is travelling abroad.
medicare - A federal program that pays for certain health care expenses for people aged 65 or older.
monetary policy - Actions taken by the Board of Governors of the Federal Reserve System to influence the money supply or interest rates.
NAPFA - The National Association of Personal Financial Advisors
Notary Public - A person authorized by the state to notarize certain documents.
objective financial advice
pension - A fund that is established for the payment of retirement benefits.
perpetuity - A recurring periodic series of payments that has no definite end.
plan - Written account of intended future course of action (scheme) aimed at achieving specific goal(s) or objective(s) within a specific timeframe.
planner - A person who plans.
planning - The process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals.
portfolio - A collection of investments, real and/or financial.
portfolio design - Setting goals/objectives for your portfolio and deciding on your investments.
portfolio rebalance - The act of changing the percentages of different types of securities in a portfolio, especially according to changes in one's investment goals.
portfolio review - An examination of your investments to discover and fix any weaknesses.
preparation - State of making something ready for use. Preparations are typically done in anticipation of an event occurring in the near future.
prepare - To plan or organize.
professional - Person formally certified by a professional body of belonging to a specific profession by virtue of having completed a required course of studies and/or practice. And whose competence can usually be measured against an established set of standards.
proprietor - Sole owner, or one of the owners.
proprietorship - An unincorporated business that is owned and operated by only one person who has complete liability for all assets, and complete rights to all profits.
Registered Investment Advisor (RIA) - An Investment Adviser who is registered with the Securities and Exchange Commission or a state's securities agency.
represent - To act as an agent to another.
representation - A portion of the application signed by a potential insured that states that the applicant has provided the information truthfully, to the best of his or her knowledge.
retirement advice - Recommendations for you retirement plan.
retirement benefits - Compensation, not paid as wages, in the form of a retirement plan offered by an employer to its employees.
retirement planning - A plan provided by an employer (or a self-employed individual) for employees' retirement.
revenue - Sales or royalty proceeds. Quantity times price sold.
risk - The quantifiable likelihood of loss or less-than-expected returns.
risk management - The process of analyzing exposure to risk and determining how to best handle such exposure.
risk tolerance - An investor's ability or willingness to accept declines in the prices of investments while waiting for them to increase in value.
Roth IRA - Individual Retirement Account that allows contributors to make annual contributions and to withdraw the principal and earnings tax-free under certain conditions.
S Corporation - A corporation that elects not to be taxed as a corporation. That is, the corporation does not directly pay federal income tax on its earnings. Similar to a partnership, it passes its income or losses and other tax items on to its shareholders.
savings plan - A plan for how you are going to save in order to reach your savings goal.
SEC - Securities and Exchange Commission
small business - Designation for firms of a certain size which fall below certain criteria (that varies from country to country) in terms of annual turnover, number of employees, total value of assets, etc.
social security - The comprehensive federal program of benefits providing workers and their dependents with retirement income, disability income, and other payments. The Social security tax is used to pay for the program.
socially - Appropriate behavior in a public setting.
Socially Responsible Investing (SRI) - The practice of appropriate investment behavior in a public setting.
sole proprietorship - A business owned by a single individual. A sole proprietor pays no corporate income tax but has unlimited liability for business debts and obligations.
stocks - Ownership of a corporation indicated by shares, which represent a piece of the corporation's assets and earnings.
strategy - The general or specific approach to investing that an individual, institution, or fund manager employs.
tax representation - A representative advocates on your behalf before the IRS or other taxing authority.
tax planning - Considering the tax implications of individual or business decisions throughout the year, usually with the goal of minimizing the tax liability.
traditional IRA - A tax-deferred individual retirement account that allows annual contributions of up to $2000 for each income earner. Contributions are fully deductible for all individuals who are not active participants in employer-sponsored plans or for plan participants within certain income ranges.
Treasury bills - Debt obligations of the US Treasury that have maturities of one year or less. Maturities for T-bills are usually 91 days, 182 days, or 52 weeks. Treasury bills are sold at a discount from face value and do not pay interest before maturity. The interest is the difference between the purchase price of the bill and the amount that is paid to you either at maturity (this amount is the face value) or when you sell the bill prior to maturity.
Treasury bonds - Debt obligations of the US Treasury that have maturities of more than 10 years.
Treasury notes - Debt obligations of the US Treasury that have maturities of more than one year, but not more than 10 years.
trust - A fiduciary relationship calling for a trustee to hold the title to assets for the benefit of the beneficiary. The person creating the trust, who may or may not also be the beneficiary, is called the grantor.
umbrella policy - Insurance for exports of an exporter whose issuer handles all administrative requirements.
variable annuity - An insurance product regulated by the SEC. Pay amounts that vary based on the investment performance. Typically have large commissions to seller, high annual management fees and may have high surrender charges.
will - A legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children.
Read more: http://www.investopedia.com/articles/pf/08/what-is-a-will.asp#ixzz1OouovIXe