Insurance is a way of protecting yourself from significant, unforeseeable financial losses. It is a form of risk management. You pay a little each month to your insurance company, and in return, they cover your expenses in the event that something bad happens. Insurance is a contract (policy) in which the insurer (insurance company) agrees […] More
Tax efficiency – A financial process (set of transactions) is said to be tax-efficient if it is taxed at a lower rate than an alternative financial process that achieves the same end. An example of tax efficiency is retirement investing using a 401(k) rather than a standard brokerage account. Investing in a 401(k) is more […] More
Let’s assume the capital gains tax is 20% and the market year-on-year returns is 10%. To make $100,000 a year just from the return on investments, here is the math: Total yearly return before capital gains tax = $100,000 /(100% – 20%) = $125,000 Total amount invested = $125,000 / 10% = $1.25M So to […] More
Year to date (YTD) refers to the period of time beginning the first day of the current calendar year or fiscal year up to the current date.
A surcharge is a fee, charge, or tax added but may not be included in the stated price of a good or service.
A general ledger represents the record-keeping system for a company’s financial data with debit and credit account records validated by a trial balance.
A credit score is a number between 300–850 that depicts a consumer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders.
Coinsurance is the claim amount an insured must pay after meeting deductibles and is also the level to which an owner must protect property.
A bounced check is slang for a check that cannot be processed because the writer has insufficient funds.
Certified Public Account (CPA) Chartered Accountant (CA) More
Full Playlist: https://www.youtube.com/playlist?list=PLA2D2B3D48E621BCA–Watch more How to Understand Personal Finance Terms videos: http://www.howcast.com/v…
Bankruptcy is a legal proceeding involving a person or business that is unable to repay their outstanding debts. It is carried out to allow them freedom from their debts. https://www.investopedia.com/terms/b/bankruptcy.asp More
A balance sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specific point in time.
An audit is an unbiased examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent.
Annualized income is an estimate of the amount of money that an individual, business or asset will earn over the course of a year.
Actuarial science is a discipline that assesses financial risks in the insurance and finance fields, using mathematical and statistical methods.
Accounts receivable (AR) is the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers. Accounts receivables are listed on the balance sheet as a current asset. More
We’re talking about the different types of insurance you need to have and why. Each one of these types of insurance helps reduce your financial risk as you work to save money and build wealth on your way to financial freedom.
Watch the video above for the basics of exchange rates.
An exchange rate is the value at which one currency can be exchanged for another.
The exchange rate is represented as a ratio of the two currencies. It tells you how much of the top currency you can get for one unit of the bottom currency.
For example, if the exchange rate between the Euro and the US Dollar is 0.81, that means 1 US Dollar equals 0.81 Euros.
Watch the linked video for an introduction to derivative securities.
For more information, here is a very clear, in-depth video on derivatives: Financial Derivatives – Lecture 01. In this video he leaves out the details of swaps, so you can watch this video on swap derivatives: How swaps work – the basics
Related key concepts:
Definitions
Forward and Futures
Options
Watch the linked video for an introduction to equity securities.
Related key concepts:
Introduction
Introduction to Equity
Valuing Equity Securities
Watch the linked video for an introduction to debt securities.
Related key concepts:
Introduction
Introduction to Debt Securities
Valuing Debt Securities
Watch the linked video for an introduction to the Capital Asset Pricing Model (CAPM).
Related key concepts:
Watch the linked video for an introduction to the net present value (NPV).
Related key concepts:
Watch the linked video for an introduction to present value.
Related key concepts:
Watch the linked video for an introduction to the time value of money.
Other key concepts:
Learn how mortgages work, how to use a mortgage calculator, and how to use a spreadsheet to show the payoff of a mortgage over time, and the interest paid each year.
Mark to market is an accounting method that values an asset at its current market value, instead of how much you purchased it for. It shows how much you would receive if you sold the asset today. More
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