An investment is something you buy in the hopes of making money on it, like stocks, bonds, real estate, etc..
Archive for the ‘Daily Definition’ Category
An Investment is…
Wednesday, October 7th, 2009A Trust is…
Wednesday, October 7th, 2009A trust is a legal structure set up by one person (the trustor) for another person (the beneficiary) to use in the future. It is managed by a person or institution (the trustee). For example, a father might set aside money in a trust for his 16-year old son to inherit when he turns 18.
Net Income is…
Wednesday, October 7th, 2009Net income is the income that remains after subtracting all costs, expenses, and taxes. For example, if your frozen banana stand made $100 today but you had to spend $35 on bananas and then $5 in taxes, your net income would be $60 ($100 income – $40 costs).
A Share is…
Wednesday, October 7th, 2009A share is a unit of ownership in a company. You can own shares of stock or shares in a mutual fund. The more shares you own, the larger your stake in the company or investment vehicle.
An IPO is…
Monday, October 5th, 2009An IPO or “initial public offering” is when private companies become public by making shares of their stock available to the public for the first time. Companies do this for lots of reasons including raising money, changing owners, to have a public currency to buy other companies, and/or to create an incentive for employees. After the IPO the public can buy shares of the company as they are now publicly traded.
Income Tax is…
Monday, October 5th, 2009Income tax is an annual tax collected by federal, state, and sometimes local governments. It is structured so that the more money you earn, the higher the percentage you pay in income taxes. Income tax is the main source of revenue for the U.S. government.
A Nonprofit is…
Monday, October 5th, 2009A nonprofit is an organization that exists mainly to address a social or public issue – not to earn profits for its owners or stakeholders. Sometimes, nonprofits are called charitable organizations or charities.
A nonprofit can pay its employees reasonable salaries, but all the money it brings in from grants, fundraising, or other activities is supposed to be used for charitable work. Nonprofits are exempt from paying many taxes that for-profit organizations (businesses) have to pay.
Debt is…
Friday, October 2nd, 2009Debt is an amount owed to a person or organization for funds borrowed. For example, if you were to get a loan to pay for college, you are in debt and owe the bank however much you borrowed plus a pre-determined cost in the form of interest.
A Government Bond is…
Friday, October 2nd, 2009A government bond (in the U.S.) is issued by the United States Treasury and is considered one of the safest securities in the investment world. Bonds are issued to raise money and in exchange, the purchaser receives a predictable fixed interest rate for the duration of the bond.
A Beneficiary is…
Wednesday, September 23rd, 2009A beneficiary is a person or institution who receives benefits from a trust, will, or life insurance policy. For example, when parents set up trust funds for their children, the children are the beneficiaries.