Investing Basics

Vocabulary flashcards covering basic investing terms.

Income Investors

Investors who use investments to generate money to live instead of working for another company.

Retirement Investor

A person who makes investments to have enough income for their lifestyle after they stop working.

Investment

The action or process of investing money for profit or material result.

Pension

A regular payment during retirement from an investment fund to which the person or their employer contributed during their working life.

Social Security

Federal program of disability and retirement benefits that covers most working people.

401(k)

A qualified retirement plan sponsored by an employer.

Roth IRA

A personal savings plan; contributions are not tax-deductible; earnings are tax-free.

Rule of 72

The number of years it takes for a sum to double in value is 72 divided by its annual rate of interest.

Compound Interest

Earning interest on interest.

Financial Securities

Stocks, bonds, and mutual funds; the broad category of tradable financial instruments.

Savings Account

A bank account that earns interest.

Bond

A financial security that represents a promise to repay a fixed amount of funds.

Mutual Fund

A fund that pools the savings of many individuals and invests in a variety of stocks, bonds, and other financial assets; managed by a financial manager.

Stock

A share of ownership in a corporation.