Personal Finance, Investing, and Insurance Key Concepts

Vocabulary flashcards reviewing core concepts in investing, savings goals, financial planning, and insurance fundamentals.

Stock

A small piece of ownership in a company, sold to the public to raise capital for growth and expansion.

Bond

An IOU or loan made to a company or government.

Capital Gains

The profit earned from selling an investment for more than the purchase price.

Dividends

A portion of a company's profits distributed as regular payments to shareholders.

Diversification

The practice of spreading out investment risk, illustrated by the saying 'Don't put all your eggs in one basket,' commonly achieved through mutual funds or ETFs.

Principal

The original amount of money invested or saved.

Interest

The fee paid for the use of borrowed money.

52-Week High/Low

A data point in a stock quote that shows the stock's highest and lowest price range over the past year.

Emergency Fund

Money set aside for unexpected expenses, best kept in a liquid vehicle such as a savings account or higher-yield saving account.

Short-Term Goal

A financial target planned for the near future, such as saving for a vacation next month.

Medium-Term Goal

A financial target planned over an intermediate timeframe, such as saving for a down payment on a house in 4 years.

Long-Term Goal

A financial target planned far in advance, such as saving for retirement in 40 years.

Pay Yourself First

A personal finance strategy where you allocate money toward savings before paying other bills or spending on wants.

Premium

The regular payment made to an insurance company to maintain an active policy.

Deductible

The out-of-pocket amount an insured person must pay before the insurance company begins paying coverage.

Auto Insurance

A type of insurance coverage that is legally required for drivers.

Life Insurance

Insurance that provides a tax-free payment to designated beneficiaries upon the policyholder's death.

Renters Insurance

A policy that covers a tenant's personal belongings against damage or loss.

Health Insurance

A policy that helps cover medical care expenses and bills from doctors and hospitals.

Disability Insurance

Insurance that replaces a portion of your income if you become unable to work due to an injury.

Risk

The possibility that an investment will lose value.