E58 20 New Words

E58 20 New Words by LB teacher

401(k)

A tax-advantaged retirement savings plan offered by employers in the United States that allows employees to contribute a portion of their salary pre-tax (or post-tax with a Roth 401(k)). Employers often offer matching contributions. Funds grow tax-deferred until withdrawal in retirement. 💼💵🏖 | retirement plan, tax-deferred savings, employee pension

Amortization

The process of gradually paying off a debt over a set period through regular payments that cover both principal and interest. Also refers to the spreading of intangible asset costs over a period. 🏦💳🗓️ | debt reduction, loan repayment, cost allocation

Annuity

A financial product where an investor makes a lump-sum payment or series of payments in exchange for regular income payments over a specified period or for life. Often used for retirement income. 🏦💵⏳ | income stream, pension plan, periodic payment

Audit

A systematic examination of financial statements, accounts, and records to ensure accuracy, compliance, and integrity. Can be internal or external and often performed by certified auditors. 🕵️‍♂️📜✅ | inspection, review, examination

Collateral

An asset pledged by a borrower to secure a loan and reduce lender risk. If the borrower defaults, the lender can seize the collateral to recover losses. 🏠💵🔒 | security, guarantee, pledged asset

Consumer Price Index (CPI)

A measure of inflation that tracks the average change in prices paid by consumers for a basket of goods and services over time. Used to gauge purchasing power and cost of living. 🛒📈💡 | inflation measure, price index, cost

Court of Public Opinion

An informal and influential forum where the general public judges individuals, organizations, or actions based on perception, media portrayal, and social discourse, often impacting reputation and behavior. 👥🗣️⚖️ | public judgment, social verdict, reputation court

Deductible

The amount an insured person must pay out-of-pocket before insurance coverage begins to pay for covered expenses. Higher deductibles often result in lower premiums. 💵🩺💳 | out-of-pocket cost, initial expense, coverage threshold

Depreciation

The gradual reduction in value of a tangible asset over its useful life due to wear, tear, or obsolescence. Used in accounting to allocate cost and in tax calculations. 🏭📉📅 | asset devaluation, cost allocation, wear

Dow Jones

Short for the Dow Jones Industrial Average (DJIA), a stock market index tracking 30 large, publicly owned blue-chip companies in the United States. A key indicator of market performance. 💼📊🏦 | market index, stock gauge, blue-chip benchmark

FICO Score

A credit score developed by the Fair Isaac Corporation that assesses an individual’s creditworthiness based on payment history, debt level, length of credit history, credit mix, and new credit. Ranges from 300 to 850. 💳📊🔍 | credit rating, credit score, financial reputation

Fiscal Policy

The use of government spending and taxation to influence the economy, manage economic growth, employment, and inflation. Controlled by government bodies rather than central banks. 🏛️💰📜 | tax policy, government spending, economic policy

Gross Domestic Product (GDP)

The total monetary value of all finished goods and services produced within a country’s borders in a specific period. A key indicator of economic health. 🌍💵📊 | economic output, national income, total production

IRA (Individual Retirement Account)

A tax-advantaged retirement savings account available in the United States where individuals can contribute and invest funds with tax benefits. Taxes are deferred until withdrawal in retirement. 🏖💵📈 | retirement savings, tax-deferred account, investment account

Monetary Policy

The process by which a central bank (e.g., Federal Reserve) controls the money supply, interest rates, and inflation to achieve economic stability and growth. 🏦💰📉 | central bank policy, interest rate control, economic regulation

Nasdaq

Nasdaq - A global electronic marketplace for buying and selling securities with a focus on technology and growth stocks. Known for its highly liquid and tech-heavy index, the Nasdaq Composite. 💻📈💵 | stock exchange, tech market, electronic trading

Premium

The amount paid periodically for insurance coverage or the extra cost for a higher-value asset or investment. In options trading, it represents the cost of acquiring an option. 💵🔒🩺 | insurance cost, additional charge, option price

Principal

The original sum of money borrowed or invested, excluding interest or earnings. In loans and investments, repayments or returns are often based on the principal amount. 💵📜💳 | original amount, loan balance, investment capital

Roth IRA

A type of Individual Retirement Account (IRA) where contributions are made with after-tax dollars and qualified withdrawals are tax-free in retirement. Offers tax-free growth and retirement income. 🏖💰📈 | tax-free IRA, retirement account, after-tax savings

S&P 500

• A stock market index that tracks the performance of 500 large-cap publicly traded companies in the United States, representing a broad indicator of the U.S. equity market. 📊💵🏦 | market benchmark, equity index, large-cap index