🇨🇦 : Canadian
🇫🇷 : French
🇬🇧 : UK
🇦🇺 : Australian
Any definition without a flag is general/USA.
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Annual percentage yield is the rate of return for your investment, which also includes your expected earning in compound interest.
Many defendants cannot afford to pay bail, which allows them to not have to sit in jail as they await their trial. So, they seek the help of a bail bondsman who helps them pay bail but then charges them a fee of usually 10-20% of the initial bond, which is used as collateral so that the defendant shows up to trial.
Taking your debt from one place (typically a credit card) and moving it to another play that oftentime has a lower interest rate.
The debt of a company or government. When you buy a bond, you are giving a company/government a loan and earning money on the interest.
A brokerage is a company through which you can make investments in assets and funds. For example, TD Ameritrade, Charles Schwab, Fidelity, Vanguard, and Robinhood are all examples of brokerages.
An investing account at a brokerage firm. Brokerage firms buy and sell stocks, bonds, options, and other financial products on behalf of clients.
Instead of feeling guilt about spending money, it allows you to focus on spending money on the things you love without explanation or justification. It’s a permission slip. It also helps you avoid the guilt of not taking care of yourself financially. It makes sure that you’re factoring in your financial well-being in addition to your wants.
If you get arrested, you can be held in jail until your court date. Studies show that judges place higher bail amounts on people of color, which means the whole system relies on racism –– from the arrests and the policing of communities to the economic state of the communities most affected. The alternative is sitting in jail for six months or sometimes years awaiting trial.
A savings account with a higher interest rate, but in exchange, you cannot access your money for a certain period of time.
The Consumer Financial Protection Bureau makes sure that banks, lenders, and financial institutions are playing fair.
Taking multiple debts and putting them together with only one interest rate (often a lower rate than you were paying before).
A payment made electronically from one person to another.
Money you can spend on things you want, not on things you have to buy. This is your “fun money.”
Three to six months of living expenses saved in a high-yield savings account.
If you contribute a percentage of your salary to your retirement account, your workplace will match it (ex: a 3% match means if you contribute 3% of your salary, your employer will as well).
Everything that costs you money in order to eat, sleep, and live.
A money manager or a broker who provides services to a client. If you’re reading this book, you probably don’t need one yet (PLEASE make sure they are a fiduciary.)
The act of embracing the power you already possess in order to help yourself — and those around them — reach financial equality.
A type of financial advisor that is legally bound to make decisions in your best interest.
A type of tax form that you fill out when becoming an employee. It helps the IRS calculate how much of your income should be taxed. Come tax time, it will determine how much you’ve made and how much you’ve paid in tax.
You’ll most likely receive this form at the start of a new job. It helps determine how much tax you would like your employer to withhold from your paycheck.
A form that individual taxpayers fill out in order for the IRS to calculate the amount of taxes they're owed. It’s also where you set your filing status and claim and deductions and will determine what your tax refund may be.
The Canadian version of a HYSA.
A savings account with a higher than average interest rate that helps your savings stay up to date with inflation.
A mutual fund or an ETF (exchange-traded fund) is designed to track a particular financial market index –– for example, the S&P 500 (The S&P 500 is simply the 500 biggest companies on the stock market.)
The rate in which the price of goods in services in the economy is increasing.
The percentage of money that accrues and you are responsible for paying on top of the money that was lent to you.
The money that accrues on top of the money that was lent to you.
Individual retirement account, meaning it’s not tied to your employer. The annual maximum contribution is usually $6,000.
The amount of credit you have available to use.
Market research tells you what you should be getting paid relative to other people in your industry, with the same experience level.
When you withdraw more money that you have in your account, you receive an overdraft fee.
Payday loans are a short-term loan, designed (in theory!!) to cover the individual until their next payday, with insanely high interest rates.
A guaranteed regular monthly payment from your employer that begins paying out when you retire. In order to become eligible for the full pension amount, you usually have to work a set number of years.
Our neighbor to the north is known for its social programs, and their pension system is no different. Canada’s pension program is completely funded through the government and available to citizens who have lived there for at least ten years.
The French system of retirement is built around pensions. These are compulsory payments (AKA non-optional), but there are additional private pensions you can take out if you’d like to contribute beyond your requirements.
Important note for US expats –– you need to work in France for ten years to be able to take advantage of their pensions.
Like France, Australia has a social pension program for its citizens called Age Pension. Also, like France, you must meet a 10-year citizen requirement.
Borrowed money that you use for personal reasons, you receive one based on your credit history and income.
A term used to describe the fact that items marketed toward women are often more expensive than the same items marketed toward men.
A portfolio is the collection of investments that you have made.
The original sum of money you borrow on a loan.
A work benefit where you take time off but still get paid for the time worked.
Rate of return is how much your investments have either lost or gained over a specific period of time.
Investment accounts that are specifically for retirement. They are tax-advantaged.
Strategically investing with the goal of being able to retire and live off of the money you invested.
Return on investment is a way to make sure your investments are doing what they’re supposed to do — earn you money!
A company who invests for you, but they take a percentage of the money (usually .25-.5% on top of any fund-specific fees).
A Roth IRA is a tax-advantaged retirement account that is not tied to your employer, meaning just about anyone can open one. That’s exactly what the “I” in IRA stands for— Individual Retirement Account. You can open a Roth IRA at any age as long as you have a job and unlike a traditional IRA, there are no required minimum distributions.You also pay the taxes now and receive the tax benefits later.
A type of bank account that usually accrues some sort of interest.
Simplified employee pension is another kind of IRA. Like a traditional IRA, you pay the taxes you owe when you withdraw money (i.e. at retirement age). It’s designed for solopreneurs or companies with a few people. Maximum contribution to a SEP is $56,000/year limit, or up to 25% of your income (whichever comes first).
Based on the principal amount of a loan or the first deposit in a savings account.
Slivers of companies, so owning a stock means you’re a part-owner in a company.
Like the Roth IRA, this is an individual retirement account, meaning it's not tied to an employer. You won't pay any taxes on this money until you withdraw it at retirement, so you receive benefits now rather than later.
An individual who does not have a bank account.
People who live in areas where financial services are not easily accessible.
The act of spending a majority of your discretionary money on what brings you true value and joy.
An investment account linked to your employer can give you tax advantages. Many 401(k)s allow you to set a certain amount of money that is automatically deducted from each paycheck and put into your investment account. This money is typically pre-tax up to an annual dollar limit (the specific limit depends on the type of 401(k) you have). Some employers offer what’s called a match, where they will match every dollar you invest up to a certain dollar amount or percentage of your salary. This is free money! If your employer has a match, take advantage of it!