COPYRIGHTED MATERIAL
WHAT DOES THAT MEAN?
TERM
DEFINITION
asset class
a grouping of similar type investments.
bond
a form of debt that corporations and governments issue to borrow money from the public.
brokerage account
an account held by an investor with a licensed brokerage firm which allows the investor to buy and sell securities and other investments. an increase in the value of an asset; profit resulting from the sale of an asset. difference between what the landlord collects in rent and pays out in expenses; cash flow can be break-even, negative or positive. a share of stock that represents ownership in a corporation but doesn’t pay a regular dividend.
capital gain
cash flow
common stock
debenture
an unsecured bond.
a tradable financial instrument in the form of a bond. PRODUCT PREVIEW a risk management technique allocating investment dollars among a variety of investments. a portion of a corporation’s profit that is distributed to shareholders. shares of stock in a corporation. a flow of money generated by a business or an asset. a professionally managed investment fund that pools the money of many individual investors to purchase large blocks of stock or other securities. an investor’s collection of investments. stock that pays a regular dividend. “REIT”; a company or fund that pools investors money and invests in income producing real estate. “ROI”; a profitability ratio used to evaluate an investment; calculated by dividing the return on the investment by the cost of the investment. a public market for buying and selling stocks and bonds.
debt security diversification
dividend
equity security income stream
mutual fund
portfolio
preferred stock Real Estate Investment Trust
Return on Investment
securities market
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Caution! Let’s begin this chapter with a word of caution and some advice. There are many different types of investments, and investing can be a complicated and risky process. It is also key to building wealth. Like any activity involving your hard earned money, you should know what you are getting into when you invest. Learn as much as you can about investing (it’s actually very interesting), and before you invest in anything, read all of the disclosures and talk with a professional investment advisor . Understanding the potential risks
Chapter 11 | Investing 101 198
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