Some Personal Finance Terms

Some Personal Finance TermsKnowing personal finance terms are an important piece of information to have. If you do not know the terms how do you 4785.-plan to navigate the personal finance world? You have heard the saying knowledge is power and you know it is true. Here are some personal finance terms to help you understand and navigate the personal finance world.

Some life insurance policies have Accelerated Death Benefits. If yours does then you may be able to use a portion of the benefit to pay for various healthcare and medical related expenses. Do note however, that if you take some of the money out of your life insurance policy to pay for various healthcare and medical related expenses you will be leaving less to your beneficiaries.

The Average Annual Yield is the average yearly income you receive on an investment. This is expressed as a percentage. To calculate this amount you add up all the income you have received on any given investment, and then you divide that amount by the number of years that you had money invested there.

The Balance of Trade is the difference in the value of a country’s exports and imports during a specific period of time. If any given country is able to export more than it imports than there is a surplus. If any given country exports less than it imports than there is a deficit or unfavorable balance.

A Current Yield is a measure of your rate of return on any given investment. This is expressed as a percentage. With a bond, your current yield is calculated by dividing the interest you have collected by the current market price.

Depreciation is when certain things such as buildings, decline in value over time. There are times you can write off this cost.

When an auction starts at the highest possible price and then drops down in price until someone is willing to purchase the item, the auction is called a Dutch Auction.

An Emerging Market is what we call a country that is in the process of building market-based economies. There is more than one type of emerging market.

The percentage of a mutual fund’s or variable annuity’s total assets that is deducted to cover operating and management expenses is known as an expense ratio.

Fund Networks are also called fund supermarkets. These offer access to thousands of different mutual funds from many of the major fund families. It is much easier to diversify your portfolio if you invest through a fund network.

A deposit account is also known as a General Account. All assets in a general account can be used to cover a company’s expenses and they are also vulnerable to any creditor’s claims.

There are many financial terms that you should know. These are just some. If you come across a term that you do not know the best thing that you can do for yourself is to find out what it means. If you do not know then you are setting yourself up for failure in the financial world.

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