Here at Hack Your Wallet, we aim to provide informational material on key concepts in finance. Simply because we believe that these concepts are essential to financial literacy. However, to have better grasp of these concepts and to be able to make the best investment decisions, there are jargon to learn. We keep all the jargon here in one place for your reference. Find below the definitions of all the key financial terms every one should know by heart. Do not hesitate to email us on [email protected] if you want us to add more or have any questions.
Accounting definition for asset is anything you own. On HYW, we usually mean an investment.
Group of assets that behave similarly or have similar characteristics.
Ability to borrow money or access goods or services with the understanding that you’ll pay later.
Failure to meet legal obligations of a loan or credit agreement. In simple terms, failure to pay back debt.
Debt that is backed by an asset, called a security. In case of a default, lender has the right to seize the asset.
The amount of money to be made on an investment as a percentage of the invested capital.
Rate of return before the deduction of fees, commissions, taxes and any other costs related to the investment.
Rate of return after the deduction of fees, commissions, taxes and any other costs related to the investment.
Total salary before tax and national insurance/social security deductions.
Total salary after tax and national insurance/social security deductions
Annual rate at which interest is charged on borrowing.
Annual rate that is derived from a bi-annual, quarterly, monthly, weekly or daily interest rate.
Original borrowed sum.
Original invested sum.
The spreading of loan repayments over a fixed time period.
Number of years at which a loan is amortised/repaid.
The ratio of amount borrowed to the value of the secured asset, usually property.