**lex·i·con** /ˈleksiˌkän,ˈleksiˌkən/: the vocabulary of a person, language, or branch of knowledge.

To be financially literate means you are confident in understanding financial concepts such as saving and investing. Becoming financially literate can lead to an overall sense of economic well-being and self-trust, leading you to make informed and effective decisions in life.

We developed the $HMONEY Lexicon to help you better understand the branch of knowledge that is finance. The Lexicon will continuously evolve, and we'll add terms as different topics relating to finance are explored. Please send us a message to request a definition to be added to the Lexicon.

501(c)(3) Organization

One of the tax law provisions granting exemption from the federal income tax to nonprofit organizations that exist for religious, charitable, scientific, literary, or educational purposes, among others.

50-30-20 Rule

A budgeting method first established in U.S. Senator Elizabeth Warren’s book, All Your Worth, that was published in 2005. According to Canada’s KOHO, the book was originally named the 50/20/30 rule. Basically, the 50/20/30 rule for budgeting divides your spending and saving into three categories. These categories are to be divided from your after-tax income: needs, wants, and savings.

Abundance

A very large quantity of something; plentifulness of the good things of life; prosperity.

Abundance Mindset

A frame of mind that allows you to see the limitless potential in life, yourself, and everyone around you.

Accountant

A professional who is responsible for keeping and interpreting financial records for businesses, large corporations, and individuals.

Accredited Investor

An investor with a special status under financial regulation laws which can vary between countries.

Accrued Interest

Interest that has been incurred, as of a specific date, on a loan or other financial obligation but has not yet been paid out.

Acquisition

Transactions in which the ownership of companies or their operating units are transferred or consolidated with other entities.

Adjustable-Rate Mortgage (ARM)

Also called variable rate or floating mortgages, ARMs are home loans with a variable interest rates. The initial interest rate is fixed for a period of time.

After-Hours Trading

A term that describes the buying and selling of securities when the major markets are closed.

Alternative Investment

Supplemental investment strategies to stocks, bonds, and cash. Alternative investments are factored into 5 main categories: hedge funds, private capital, natural resources, real estate, and infrastructure.

Amortization

The process of spreading out a loan into a series of fixed payments. The loan is paid off at the end of the payment schedule and your last payment will pay off the final amount remaining on your debt.

Angel Investor

An individual who provides capital for a business,usually in exchange for ownership equity. Also known as a private investor, seed investor or angel funder.

Annuity

A fixed stream of payments to an individual, primarily used as an income stream for retirees.AppreciationAn increase in the price or value of an asset.

Arrears

Part of a debt that is overdue after missing required payments.

Assets

A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit.

Asset Management

Normally taken care of by portfolio managers or financial advisors, asset management increases total wealth over time by acquiring, maintaining, and trading investments that have the potential to grow in value.

Audit

An official inspection of an individual's or organization's accounts, typically by an independent body

Bag

A large goal that typically falls into one of three categories: 1. Money/material wealth. 2. Larger goals in your life. 3. A literal bag, which you can store things in (like money or marijuana).

Balance

The amount of money present in a savings or checking account.

Bank

A financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank.

Bankruptcy

A legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts.

Bank teller

An employee of a bank whose responsibilities include the handling of customer cash and negotiable instruments.

Barter

A transaction in which goods or services are directly exchanged for others without using a medium like money.

Bear Market

The opposite of a bull market, a bear market is defined by a prolonged drop in investment prices (when prices fall by 20% or more from their most recent high). (See Bull Market)

Benefits

A payment or service provided under an annuity, pension plan, or insurance policy; a service (such as health insurance) or right (like vacation time) that's provided by an employer in addition to wages or salary; financial help in time of sickness, old age, or unemployment.

Beneficiary

Someone who is eligible to receive distributions from a trust, will, or life insurance policy.

Billing Cycle

The time between two financial statement closing dates.

Bitcoin

Created in 2009, Bitcoin is a decentralized digital currency that records transactions in a distributed ledger called a blockchain. Bitcoin is without a central bank or single administrator, and it can be sent from user to user on the peer-to-peer bitcoin network without third party interference.

Blockchain

A digital, public ledger that records online transactions. A blockchain ensures the integrity of a cryptocurrency by encrypting, validating, and permanently recording transactions. Blockchain is the core technology for cryptocurrencies like Bitcoin.

Blue Chip Stock

A stock in a company with a reputation for quality, reliability, and the ability to operate profitably in good and bad times.

Bond

According to Forbes, bonds are investment securities where an investor lends money to a company or a government for a set period of time, in exchange for regular interest payments. Once the bond reaches maturity, the bond issuer returns the investor’s money. Companies sell bonds to finance ongoing operations, new projects or acquisitions. Governments sell bonds for funding purposes, and also to supplement revenue from taxes.

Borrower

A person or organization that takes out a loan from a bank under an agreement to pay it back later. (See Creditor)

Broker

A person who arranges transactions between a buyer and a seller for a commission.

Budget

An estimation of revenue and expenses over a specified period of time. The 50/30/20 rule is an example of a budgeting method. (See 50/30/20 Rule)

Budget Deficit

When a government (or individual) spends more money than it takes in.

Bull Market

According to Investopedia, a bull market is a period of time when the price of an asset or security rises continuously. The commonly accepted definition of a bull market is when stock prices rise by 20% after two declines of 20% each. The term "bull market" can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.

Buy Now Pay Later (BNPL)

Short-term financing that allows consumers to make purchases and pay for them at a future date, often interest-free. Examples of buy now pay later applications are Afterpay,Sezzle, Klarna, and Affirm.

Business

A person's regular occupation, profession, or trade; the practice of making one's living by engaging in commerce.

Business Cycle

Intervals of expansion followed by contractions (recessions) in economic activity. (See Recession)

Business Ethics

The standards for morally right and wrong conduct in business.Business ModelHow an organization creates, delivers, and captures value. A business model identifies the products or services an organization plans to sell, its identified target market, and any anticipated expenses.

Calculator

Something used for making mathematical calculations, in particular a small electronic device with a keyboard and a visual display.

Canada Revenue Agency (CRA)

The revenue service of the federal government, and most provincial and territorial governments. The CRA collects taxes, administers tax law and policy, and delivers benefit programs and tax credits.

Capitalism

An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state; an economic system in which private actors own and control property in accord with their interests. Capitalist's main goal is to make a profit.

Capital Gain (Loss)

Profit earned on the sale of an asset which has increased in value (ex. capital gains from the sale of property).

Cash Flow (+/-)

The movement of money in and out of a company.

Centralized Finance (CeFi)

In contrast to Decentralized Finance (DeFi), your money is held by banks in CeFi. CeFi is full of third parties who facilitate money movement, with each one charging fees for using their services.

Chief Executive Officer (CEO)

The highest-ranking executive of a firm. CEOs represent their companies public and are in charge of making major decisions.Co-BorrowerA person who applies for and shares liability of a loan with another borrower. Both borrowers are responsible for repayment of their loan.

Collateral

An asset that a lender accepts as security for a loan. Collateral acts as a form of protection for the lender and may take the form of real estate or other kinds of assets.

Collection Agency

A company used by lenders or creditors to recover funds that are past due.

Commission

A fee paid to a salesperson in exchange for services in facilitating or completing a sale transaction. Commissions can be used to motivate and reward salespeople.

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type.

Compensation

Money received by an employee from an employer as a salary or wages; money awarded to someone for loss, injury, or suffering.

Consumer Debt

Personal debts that are owed as a result of purchasing goods that are used for individual or household consumption.

Compound Interest

The addition of interest to the principal sum of a loan or deposit.

Consumer Price Index (CPI)

CPI represents changes in prices as experienced by Canadian consumers. Price changes are observed by comparing, through time, the cost of a fixed basket of goods and services. The goods and services in the CPI basket are divided into 8 categories including food and transportation.

Cop

To get, receive, purchase, steal, or have.

Co-Signer

Someone who applies for a loan with another individual and who contractually agrees to pay off the debt if the other borrower doesn't make payments.

Credit

The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Creditor

A person or institution to whom money is owed.CreditworthinessThe extent to which a person or company is considered suitable to receive financial credit, often based on their reliability in paying money back in the past. (See Credit Rating)

Credit Bureau

An agency that collects and researches individual credit information and sells it to creditors for a fee. Individual credit info can be sold to credit card companies and financial institutions.

Credit Card

A thin rectangular piece of plastic or metal issued by a bank or financial services company. When used to make a purchase, cardholders are obligated to pay back the borrowed money they spent, plus any applicable interest and additional agreed-upon charges, either in full by the billing date or over time. (See Credit)

Credit Counseling

Guidance on consumer credit, money management, debt management, and budgeting. Credit counseling is used to help individual debtors through education, budgeting and the use of other tools to reduce and eliminate debt.

Credit Rating

A quantified assessment of the creditworthiness of a borrower in general terms or with respect to a financial obligation. Credit ratings determine whether a borrower is approved for credit as well as the interest rate at which it will be repaid.

Credit Repair

The act of restoring or correcting a poor credit score.

Credit Score

A numerical expression based on an analysis of a person's credit files, to represent the creditworthiness of an individual; a number assigned to a person that indicates to lenders their capacity to repay a loan. The higher the number, the better! (See Credit Rating)

Cryptocurrency

A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority. Cryptography makes it nearly impossible to counterfeit or double-spend cryptocurrency. Many cryptocurrencies are decentralized networks based on blockchain technology. An example of cryptocurrency is Ethereum.

Currency

A system of money in general use in a particular country.

Day Trader

A trader who executes a relatively large volume of short and long trades to capitalize on intraday market price action. The goal is to profit from very short-term price movements.

Decentralized Finance (DeFi)

Decentralized finance (DeFi) is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. The system removes the control banks and institutions have on money, financial products, and financial services. DeFi eliminates the fees that banks and other financial companies charge for using their services. You hold your money in a secure digital wallet instead of keeping it in a bank.

Debt

Something, typically money, that is owed or due.

Debtor

A company or individual who owes money.

Debit Card

A payment card that deducts money directly from a checking account when it is used. Debt ConsolidationA form of debt refinancing that entails taking out one loan to pay off others.

Debt Settlement

An agreement reached between a creditor and a borrower in which a reduced payment from the borrower is regarded as full payment. Also called debt reduction, debt negotiation or debt resolution.

Debt-to-Income Ratio (DTI)

The percentage of your gross monthly income that is used to pay your monthly debt. DeductibleA specified amount of money that someone (the insured) must pay before an insurance company will pay a claim.

Deduction

An expense that can be subtracted from a taxpayer's gross income in order to reduce the amount of income that is subject to taxation.

Deed

A signed legal document that transfers ownership of an asset to a new owner.

Default

Occurs when a borrower fails to make required payments on a debt. DeflationA decrease in the general price of goods and services when the inflation rate falls below 0%.

Delinquent

When someone is delinquent, they are past due on financial obligation(s) such as loan, credit card, or bond payments.

Devaluation

The reduction in the official value of a currency. DisbursementThe act of paying out or disbursing money from a fund, which can include money paid out to run a business.

Discretionary Income

The amount of income remaining after the deduction of taxes, other mandatory charges, and the cost of other necessary items.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio constructed of different kinds of assets will, on average, yield higher long-term returns and lower the risk of any individual security.

Dividend

A sum of money paid regularly by a company to its shareholders out of its profits.

Down Payment

An initial up-front partial payment for the purchase of expensive items/services such as a car or a house.Due DiligenceReasonable steps taken by a person in order to satisfy a legal requirement, especially in buying or selling something.

Earnings

Money obtained in return for labor or services; the profit that a company produces in a specific time period (ex. quarterly).

Economics

Knowledge concerned with the production, consumption, and transfer of wealth. Economics focuses on the behaviour and interactions of economic agents and how economies work.Economic GrowthAn increase in the production of economic goods and services, compared from one period of time to another.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs.

Emergency Fund

Also known as contingency fund, an emergency is a personal budget set aside as a safety net for future mishaps or unexpected expenses. Experts say that an emergency fund should typically have three to six months’ worth of expenses in it.

Employment Insurance (EI)

Canada's Employment Insurance (EI) program provides temporary income support to unemployed workers while they look for employment or to upgrade their skills.

Employee Stock Options (ESO)

ESOs give employees the right to purchase shares of the corporation they work for at a fixed price during a set period.

Equity

Ownership of assets that may have debts or other liabilities attached to them.

Escrow

A deed, a bond, money, or a piece of property held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition.

Exchange Rate

The rate at which one currency will be exchanged for another currency. Exchange Traded Fund (ETF)A basket of securities (stocks, bonds, commodities or a mix) that offers diversification and easy trading.

Finance

The study and system of money, investments, and other financial instruments. Finance can be divided into three distinct categories: public finance, corporate finance, and personal finance.

Financial Advisor

Your personal finance bestie. A financial advisor provides financial advice or guidance to customers for compensation. Financial advisors can provide many different services, such as investment management, tax planning, and estate planning.

Financial Institution (FI)

Companies that focus on dealing with financial transactions, such as investments, loans, and deposits. An example of an FI is a bank.

Financial Literacy

One of $HMONEY's main teachings, financial literacy is having the skills and knowledge to make informed decisions about managing your money. Some of the basics of financial literacy and its practical application in everyday life include banking, budgeting, handling debt and credit, and investing.

Financial Plan/Planner

A document containing a person's current money situation and long-term goals, as well as strategies to achieve them. A financial planner is a type of financial advisor who helps clients meet their current money needs and long-term goals. (See Financial Advisor)

Financial Services Sector

Financial firms including banks, investment houses, lenders, finance companies, real estate brokers, and insurance companies that provide financial services to people and corporations.

Financial Technology (Fintech)

New tech that seeks to improve and automate the delivery and use of financial services. Fintechs aim to compete with traditional financial methods through innovation.

Fiscal

Anything relating to money, specifically the money that a government, business, or organization earns, spends, and owes.

Fixed Income

An income from a pension or investment that is set at a particular figure and does not vary (as a dividend) or rise with inflation.

Fixed Interest Rate

An unchanging rate charged on a liability, such as a loan or mortgage.

Foreclosure

The action of taking possession of a mortgaged property when the debtor fails to keep up their mortgage payments.

#FoundingFemme

A founding female; a series on $HMONEY Radio that gives women in business an opportunity to speak about how they founded their companies, how they secured funding, etc.

Fraud

Unlawful gain made by a criminal perpetrator. Types of fraud include tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud.

Free Market

A system in which the prices for goods and services are self-regulated by buyers and sellers negotiating without government intervention.

Free Trade

A free trade agreement reduces barriers to imports and exports between countries by eliminating all or most tariffs, quotas, subsidies, and prohibitions.

Gender Pay Gap

The difference between median earnings of men and women relative to the median earnings of men.

Globalization

The spread of products, technology, information, and jobs across national borders and cultures; the process by which businesses or other organizations develop international influence or start operating on an international scale.

Goal

The object of a person's ambition or effort; an aim or desired result.

Grace Period

A set amount of time a payment can be delayed without a penalty being imposed.

Great Depression

The greatest and longest economic recession in modern world history (1929 and 1941). This period was accentuated by a number of economic contractions, including the stock market crash of 1929 and banking panics that occurred in 1930 and 1931.

Gross Income

Wages and salary plus other forms of income, including pensions, interest, dividends, and rental income, earned by an individual.

Goods and Services Tax (GST)

A tax on goods and services sold domestically for consumption, included in the final price. GST is passed to the government by the seller of goods/services.

Gross Domestic Product (GDP)

The monetary value of all finished goods and services made within a country during a specific period.

Gross Profit

The profit a company makes after deducting the costs of making and selling its products, or the costs of providing its services.

Guarantor

A person who guarantees to pay a borrower's debt if they default.

Habit

A routine of behavior that is repeated regularly and tends to occur subconsciously.

Hedge Fund

Investment pools whose managers use a wide range of strategies in an effort to beat average investment returns for their clients. They are considered risky alternative investment choices and require a high minimum investment or net worth.

Heir/Heiress

A person legally entitled to the property or rank of another on that person's death; a person inheriting and continuing the legacy of a predecessor.

Home Equity

The value of a homeowner’s interest in their home. The amount of equity in a house fluctuates over time as more payments are made on the mortgage, and market forces impact the property's value.

Home Equity Line of Credit

A revolving source of funds, much like a credit card, that you can access as you choose.

Home Equity Loan

A consumer loan secured by a second mortgage, allowing homeowners to borrow against their equity in their home. The loan amount is based on the difference between the home’s current market value and the homeowner’s mortgage balance due.

#HoneYourHabits

A series on $HMONEY Radio that analyzes common money habits and offers listeners healthy financial/lifestyle solutions.

Human Capital

The economic value of a worker's experience and skills. Human capital includes assets like education, training, intelligence, skills, health, and other things employers value.

Hyperinflation

Monetary inflation occurring at a very high rate, typically measuring more than 50% per month. Hyperinflation can cause a surge in prices for basic goods as they become scarce, such as food and fuel.

Identity Theft

When someone uses another person's information, like their name, identifying number, or credit card number, without their permission, to commit fraud.

Income

Money received for work or through investments (including property).

Index Fund

A type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor’s 500 Index (S&P 500). Index funds are investment funds that follow a benchmark index, such as the S&P 500 or the Nasdaq 100. When you put money in an index fund, that cash is then used to invest in all the companies that make up the particular index, which gives you a more diverse portfolio than if you were buying individual stocks.

Industrial Revolution

A period of development in the latter half of the 18th century that transformed largely rural societies in Europe and America into industrialized, urban ones. Goods that had once been crafted by hand started to be produced in mass quantities by machines in factories. This period saw the mechanization of agriculture and textile manufacturing and a revolution in power, including steamships and railroads.

Inflation

A decrease in the purchasing power of money, reflected in a general increase in the prices of goods and services in an economy.

Initial Public Offerings (IPOs)

When a private company becomes public by selling its shares on a stock exchange. IPOs provide companies with an opportunity to obtain capital by offering shares through the primary market.

Insider Trading

The buying or selling of a publicly traded company's stock by someone who has non-public, material information about that stock. Material nonpublic information is any information that could substantially impact an investor's decision to buy or sell the security that has not been made readily available. Insider trading is illegal when the material information is still non-public.

Insurance

A means of protection from financial loss. Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage or from liability.

Insurance Premium

The amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance.

Interest

The monetary charge for the privilege of borrowing money, typically expressed as an annual percentage rate (APR).

International Monetary Fund (IMF)

An organization of 190 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Interest Rate

The amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum).

Investment

The dedication of an asset to attain an increase in value over a period of time. In finance, the purpose of investing is to generate a return from the invested asset.

Investment Wardrobe

A handful of clothing items that can effortlessly move from season-to-season. An investment wardrobe contains items of higher quality and cost to the owner, however, they last much longer and are much more versatile.

Joint Account

A bank account that has been opened by two or more individuals or entities, each individual having the right to deposit and withdraw funds.

Joint Debt

Any type of debt that is owed by two or more people.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Kickback

An illegal payment intended as compensation for preferential treatment or any other type of improper services received.

Knowledge Economy

An economy in which growth is dependent on the quantity, quality, and accessibility of the information available, rather than the means of production. Knowledge economy refers to the ability to capitalize on scientific discoveries and basic and applied research.

Lack

The state of being without or not having enough of somethingLayawayA system of paying a deposit to secure an item for later purchase.

Lease

A contract outlining the terms under which one party agrees to rent an asset (a property) owned by another party for a specified time period in return for a periodic payment.LeverageThe use of debt (borrowed capital) in order to undertake an investment or project.

Liabilities

Something a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.

Lien

A claim or legal right against assets that are typically used as collateral to satisfy a debt. If the underlying obligation is not satisfied, the creditor may be able to seize the asset that is the subject of the lien.

Line of Credit

A type of flexbile loan from a financial institution that lets you borrow money up to a pre-set limit. You can use as little or as much of the funds as you like and pay back the money you owe at any time.

Liquidity

The efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price.

Liquidation

The process of bringing a business to an end and distributing its assets, which occurs when a company becomes insolvent.

Loan

Money, property, or other material goods given to another party in exchange for future repayment of the loan value, plus interest.

Manifestation

The repetitive act of speaking and acting your deepest desires into existence.

Market

A place where buyers and sellers can gather to facilitate the exchange of goods and services.

Market Economy

A system in which economic decisions and pricing are guided by the interactions of citizens and businesses.

Market Share

The portion of a market controlled by a particular company or product; the percent of total sales in an industry generated by a particular company.

Maturity (Date)

Maturity (date) is the date on which the final payment is due on a loan or other financial instrument, such as a bond.

Mindset

A fixed mental attitude or disposition that predetermines a person's responses to/interpretations of situations; an inclination or a habit.

Mindset Shift

A shift in how you dominantly think.

Money

Any item that is generally accepted as payment. Also known as bread, dough, shillings, loot, ducats, bones or coin.

Money Laundering

The process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source.

Monetary Policy

The control of the quantity of money available in an economy and the channels by which new money is supplied. The objective of monetary policy is to preserve the value of money by keeping inflation low, stable and predictable.

Mortgage

A loan used to buy a home or other piece of real estate, for which that property then serves as collateral.

Mutual Fund

A professionally managed investment fund that pools money from many investors to purchase securities like stocks and bonds.

NASDAQ

An American stock exchange based in New York City. It is ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange.

National Student Loan Service (NSLS)

The National Student Loans Service Centre (NSLSC) is where Canadian students manage their student loans.NeedCircumstances in which something is necessary, or that require some course of action; necessity.

Net Income

Also called net earnings, net income is sales minus cost of goods sold, general expenses, taxes, and interest.

Net Profit Margin

The ratio of net profits to revenues for a company or business segment.

Net Worth

The total wealth of an individual, company, or household, taking account of all financial assets and liabilities.

New York Stock Exchange

An American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange.

Next of Kin

A person's closest living blood relative, someone who may have inheritance rights, and obligations.

North American Free Trade Agreement (NAFTA)

NAFTA was implemented to promote trade between the U.S., Canada, and Mexico. The agreement, which eliminated most tariffs on trade between the three countries, went into effect on Jan. 1, 1994. NAFTA essentially created a huge free-trade zone.

Not for Profit

A type of organization or enterprise that does not earn profits for its owners.(See 501(c)(3) organization)

Overdraft

A deficit in a bank account caused by drawing more money than the account holds. Overdraft allows an account holder to continue withdrawing money even when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal. There is interest on the loan, and there is typically a fee per overdraft.

Overhead

The ongoing business expenses not directly attributed to creating a product or service. Take for example, rent.

Payday Loan

A relatively small amount of money lent at a high rate of interest on the agreement that it will be repaid when the borrower receives their next paycheck.PensionA fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work.

Penny Stocks

Common shares of small public companies that trade for less than one dollar per share.

Personal Finance

The process of planning and managing personal financial activities such as income generation, spending, saving, investing, and protection. There is no "one size fits all" approach to personal finance. Personal finance is about meeting personal financial goals, whether it’s planning for retirement or saving for your child’s college education.

Portfolio

A collection of financial investments like stocks, bonds, commodities, andd cash.

Power of Attorney

Legal authorization for a designated person to make decisions about another person's property, finances, or medical care.

Prime Rate

The lowest rate of interest at which money may be borrowed commercially. Commercial banks charge their most creditworthy customers (mainly large corporations) a prime rate.

Principal

Money lent to a borrower or put into an investment. It can also refer to a private company's owner or the chief participant in a deal.

Preferred Stock

A type of stock that offers different rights to shareholders than common stock. Preferred stock holders receive regular dividends and are repaid first in the event of a bankruptcy or merger.

Ponzi Scheme

A form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Ponzi schemes are named after Charles Ponzi. In the 1920s, Ponzi promised investors a 50% return within a few months for what he claimed was an investment in international mail coupons. With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. (See The Polka King)

Promissory Note

A financial instrument that contains a written promise by one party to pay another party a definite sum of money. (See The Polka King, again)

Raketeering

The act of acquiring a business through illegal activity, operating a business with illegally-derived income, or using a business to commit illegal acts. Racketeering can be prosecuted at the state or federal level.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced.

Real Estate Investment Trust (REIT)

Companies that own or finance income-producing real estate across a range of property sectors. REITs own many types of commercial real estate, including office and apartment buildings, warehouses, hospitals, shopping centers, hotels and commercial forests. Some REITs engage in financing real estate.

Refinance

When a business or person revises the interest rate, payment schedule, and terms of a previous credit agreement.

Repossession

The taking back of property after a borrower has defaulted on payments.

Reverse Mortgage

A loan that allows you to get money from your home equity without having to sell your home (also referred to as "equity release”). You can borrow up to 55% of the current value of your home. You pay back your loan when you move out of your home, sell it or the last borrower dies. This means you don’t need to make any payments on a reverse mortgage until the loan is due.

Risk Tolerance

An individual's or company's ability and willingness to stomach a decline in the value of their investments.

Robo-Advisor

Automated algorithms that provide financial planning services with no human intervention.

Return on Equity (ROE)

The measure of a company's net income divided by its shareholders' equity.

Return on Investment (ROI)

A ratio between net income and investment.

Security

A fungible, negotiable financial instrument that represents some type of financial value, usually in the form of a stock, bond, or option.

Secured Debt

A loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. Essentially, the lender has a lien on the loan they give.

Settlement

The final step in the transfer of ownership involving the physical exchange of securities or payment.

$HMONEY (I)

A media platform, digital network, community, and podcast called $HMONEY Radio. $HMONEY offers a fun, fashionable look at financial literacy awareness, money taboos, and how to get comfortable with conversations about personal finance.

$HMONEY (II)

Inspiration for $HMONEY's nameAnother way to say "money," coined by the queen herself, Cardi B. 👑

$HMONEY Radio

$HMONEY Radio makes financial literacy approachable, attainable, and fun to talk about for millennial women. An open, inclusive, and judgment-free zone that promotes the idea of educating yourself to empower yourself, $HMONEY Radio is a safe place to discuss money matters without guilt or shame. $HMONEY Radio not only addresses personal finance stigmas and money taboos, but it also kicks down the door.

Short Selling

When an investor borrows a security, sells it on the open market, and expects to buy it back later for less money. Short sellers are wagering that the stock they are short selling will drop in price. If the stock does drop after selling, the short seller buys it back at a lower price and returns it to the lender. The difference between the sell price and the buy price is the short seller's profit.

Sinking Fund

A fund containing money set aside or saved to pay off a debt or bond. A sinking fund can also be a strategic way to save money.

Social Insurance Number (SIN)

A 9-digit number that you need to work and be paid in Canada and access government programs and benefits. It is also used to file taxes.

Spread

The difference between two prices, rates, or yields.

Stock

A financial security that represents the ownership of a fraction of a corporation. In finance, stock consists of all of the shares into which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporation.

Stock Market

The collection of exchanges and other venues where the buying, selling, and issuance of shares of publicly held companies take place; a market in which securities are bought and sold.

Subsidiary

A company that belongs to another company, which is usually referred to as the parent company or the holding company.

Supply Chain

The network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product.

Sunk Costs

A cost that has already been incurred and cannot be recovered.

Student Loan

A type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses.

Tariff

A tax or duty to be paid on a particular class of imports or exports from another country.

Tax

A compulsory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures (regional, local, or national). Taxes are mandatory contributions collected by governments. Other forms of taxes, such as property taxes, are applied based on the assessed value of a held asset.

Tax Credit

An amount of money that taxpayers can subtract directly from the taxes they owe. Unlike deductions, which lower the amount of taxable income, tax credits reduce the actual amount of tax owed.

Tax Deduction

An item you can subtract from your taxable income to lower the amount of taxes you owe.

Tax Fraud

When an individual or business entity willfully and intentionally falsifies information on a tax return to limit tax liability.

Tax-Free Savings Account (TFSA)

A way for individuals who are 18 and older and who have a valid social insurance number (SIN) to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposes.

Tax Return

A form on which a taxpayer makes an annual statement of income and personal circumstances, used by the tax authorities to assess liability for tax.

Trust

A legal entity that is set up to manage and distribute your assets. It works through legally binding terms that dictate how your wealth is managed at various points in your life.

Transaction

An instance of buying or selling something; a completed agreement between a buyer and a seller to exchange goods, services, or financial assets in return for money.

Trust Fund

A legal entity that contains assets or property on behalf of a person or organization. Trust Funds can contain money, bank accounts, property, stocks, businesses, heirlooms, and any other investment types. These assets remain in the Trust until certain circumstances are met, at which point they will be distributed to the beneficiaries by a Trustee.

Trustee

A person or firm that holds and administers property or assets for the benefit of a third party. (See Trust Fund)

Unearned Income

Income not acquired through work. Also known as passive income, unearned income includes interest from savings accounts, bond interest, alimony, and dividends from stocks.

Universal Banking

A system in which banks provide a wide variety of financial services, including those tailored to retail, commercial, and investment services. Universal banking is common in some European countries, including Switzerland.

Unsecured Loan

A loan that doesn't require any type of collateral. Instead of relying on a borrower's assets as security, lenders approve unsecured loans based on a borrower's creditworthiness. Examples of unsecured loans include personal loans, student loans, and credit cards.

Valuation

The process of determining the present value of an asset.

Venture Capitalist (VC)

A form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth. VC funding is also given in exchange for an equity stake.

Value Investing

A strategy where investors aim to buy stocks, bonds, real estate, or other assets for less than they are worth.

Value Proposition

An innovation, service, or feature intended to make a company or product attractive to customers. Also known as a "value prop".

Variable Expenses

Costs that change as the quantity of the good or service that a business produces changes.

Volatility

When a market or security experiences periods of unpredictable and/or sharp price movements.

Wage Gap

The difference between the average pay of two different groups of people, for example men and women. (See Gender Wage Gap)

Wall Street

An eight-block-long street in the Financial District of Lower Manhattan in New York City. The term "Wall Street" has its roots in the fact that so many brokerages and investment banks historically have established headquarters in and around the street. Wall Street is also used as an umbrella term to describe the financial markets and the companies that trade publicly on exchanges throughout the U.S.

Want

A desire to possess or do (something); wish for something.

Wealth

An abundance of valuable possessions or money, wealth measures the value of all the assets of worth owned by a person, community, company, or country. Wealth is determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts.

Will

Also known as a last will and testament, a will is a legally enforceable declaration of how a person wants their property and assets distributed after death.

Wire Fraud

The transfer of money from an individual or organization to a fraudster using telecommunications (e.g. phone calls) or electronic communications (e.g. emails or text messages).

Wire Transfer

An electronic transfer of funds via a network that is administered by banks and transfer service agencies around the world.

Worth

The value equivalent to that of someone or something under consideration.

Withdrawal

A removal of funds from an account, plan, pension, or trust.

Year-End Bonus

A reward paid to an employee at the end of the year. Many year-end bonuses are tied to performance metrics, and the amount can vary depending on whether certain milestones are met. Also referred to as "Christmas bonus."

Yield

An income-only return on investment (excluding capital gains) that's calculated by taking dividends, coupons, or net income and dividing them by the value of the investment. Yield is expressed as an annual percentage.

Year-Over-Year (YOY)

A growth calculation commonly used in economic and finance circles, YOY is a frequently used financial comparison for looking at two or more measurable events on an annualized basis.

Zero-Based Budgeting (ZBB)

A method that has you allocate all of your money to expenses, savings and debt payments. The goal is that your income minus your expenditures equals zero by the end of the month.