KEY TERMS GLOSSARY

Savings

Setting aside money you do not spend now for emergencies or for a future purchase. Savings refers to the money you have left over from your income after spending needs or expenses have been met. This money is kept in the form of cash or bank deposits. Savings are exposed to no risk, but also come with minimal returns.

Investing

Buying assets such as stocks, bonds, mutual funds, or real estate with the expectation that your investment will make money for you. Investments are usually used to achieve long-term goals.

Stocks

Stocks are shares (pieces) of ownership in a company.

Stock Market

The collection of physical and electronic markets where buyers and sellers can trade shares. It is like a giant, global auction. Most trading happens through stock exchanges. The stock market is the sum of all individual stocks and when an individual stock moves, the market as a whole would also move by a tiny amount.

Ticker

A symbol by which stocks are identifed. Tickers are a few letters that distinguish a company’s shares in the stock market.

Budget

An estiation of revenue and expenses over a specifed future period of time. It is a plan that allows individuals, businesses, and governments to control their spending to save for future priorities. Personal budgets are extremely useful in managing an individual’s or family’s fnances over both the short-term and long-term. Short-term = ~1 year or less Long-term = ~5-10 years

Fixed Expense

Expenses that cost the same amount each month. These bills cannot be changed and are usually paid on a regular basis (monthly, weekly, or yearly).

Variable Expense

Expenses that vary from period to period. These bills can be more easily changed or altered depending on use and needs.

Occasional (Periodic) Expense

Like fxed expenses, these bills generally cannot be easily changed; but, they do not occur on a regular weekly or monthly basis, making them more challenging to plan for.

Mutual Fund

A professionally managed fund that pools lots of investors’ money in order to buy a basket of investments.

ETF (Exchange Traded Fund)

A collection of stocks and bonds (or other securities) pooled into a single fund. You can buy and sell shares of ETFs on a stock exchange the same way you buy and sell stocks. Although they’re very similar to mutual funds, unlike mutual funds, you can trade ETFs throughout the trading day.

Investment Risk

The chance of losing all or part of the value of an investment.

Risk Tolerance

The amount of risk that an investor is comfortable taking or the degree of uncertainty that an investor is able to handle. An individuals’ risk tolerance is based on a number of factors including age, fnancial stability, and amount of time before invested funds are needed for other purposes.

Interest

The cost of borrowing money. In other words, you are paying a certain amount for the use of borrowing money. Interest is expressed as a rate, such as 3%. When you lend or invest money, a higher interest rate is better because it means you earn more. When you borrow money, a lower interest rate is better because it means you pay less. Simple interest is a set rate on the original amount lent to the borrower. The borrower will have to pay this interest.

Compound Interest

Interest on both the principle (starting amount) and the interest paid on that loan.

Infation

A general increase in prices and fall in the purchasing value of money

Current Account

A deposit account held at a fnancial institution that allows withdrawals and deposits. With a current account, you can deposit your paycheck or take out money for short-term spending.

Savings Account

An account ofered by banks that is used for money you plan to save longer term. The money in a banking account is insured by the Financial Services Compensation Scheme (FSCS).

Bond

A low-risk debt investment, similar to an I.O.U., that is issued by companies, governments or states to fund projects. When you purchase a bond, you are lending money to the borrower or “issuer.” In exchange, the issuer pays you a certain amount of interest periodically. When the bond matures (or becomes time to pay), the borrower will pay back the initial investment or the “principal” value of the bond.

FTSE 100 (Financial Times Stock Exchange 100)

The FTSE 100 is the index of the UK’s largest 100 companies, and is a key indicator often referred to by fnancial experts.

Stock Market Volatility

The frequency and magnitude of stock price movements or whole market movements, up or down. The bigger and more frequent the price swings, the more volatile the market is said to be.

Loan

Money, property, or other material goods given to another party in exchange for future repayment of the loan value or principal amount, along with interest or fnance charges. Examples: Mortgage, car loan, home renovation, starting a business.

Debt

An amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not aford under normal circumstances.

Mortgage

A type of loan you can use to buy or refnance a home. Mortgages are also referred to as “mortgage loans.” Mortgages are a way to buy a home without having all the cash upfront. When you get a mortgage, your lender gives you a set amount of money to buy the home. You agree to pay back your loan – with interest – over a period of several years. You don’t fully own the home until the mortgage is fully paid of.

Welcome to RTSWS Session #5!

• Be sure you have a pen, pencil or writing utensil • Grab a snack • Get ready to share your name, grade and if you could choose anywhere in

the world to live, where it would it be

RTSWS COHORT NORMS

Let’s review our RTSWS cohort norms. These are the expectations for our RTSWS sessions that we set during session #1.

Norms: The behavioral expectations or rules of the class. Class norms inform us how we are expected to behave towards each other and the materials we use.

• Come prepared to be a part of RTSWS with your handbook, a writing utensil and a positive attitude. • Be kind and encourage one another - we are all in this together! • Ask questions, share your opinions and let the volunteers know when you do not understand something.