GLOSSARY
ASSET - something you own that will (hopefully) make you money in the future.
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LIABILITY - something you pay money towards i.e. credit car, car, student loan
NET WORTH - the amount of money leftover when you subtract liabilities from assets. This should be tracked over time for progress.
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CASH FLOW - how money comes in and goes out and what is leftover each month.
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LIQUIDITY - how easily accessible your money is to “cash out”.
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FIXED EXPENSES - expenses that do not change each billing cycle.
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VARIABLE EXPENSES - expenses that change each billing cycle.
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GROSS INCOME - the money that you earn, whether active or passive, initially is your gross income.
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NET INCOME - the money that you keep after taxes and other expenses is considered your net income.
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IRA - an individual retirement account that encourages you to set aside funds for the future. You do not pay taxes now, you do pay taxes when you take the money out. There are some rules around when you can take the money out.
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ROTH IRA - an individual retirement account that encourages you to set aside funds for the future. You do pay taxes now, you do not pay taxes when you take the money out. There are some rules around when you can take the money out.
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401K - an employee-provided retirement option that is only available to individuals working for specific companies or businesses. There can be a match from the employer and a vesting schedule.
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403B - an employee-provided retirement option that is only available to individuals working for non-profit and other social organizations. There can be a match from the employer and a vesting schedule.
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CREDIT REPORT - a report referenced by banks and credit card companies to determine a person's history of payments, loans, and credit cards.
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FICO SCORE - a type of credit score that evaluates your ability to handle credit.
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STOCK - buying a small ownership of a company in the hopes of making money from the company's performance.
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BOND - a bond is a type of security that is issued so that the recipient can fund operations. The owner of the bond is paid back according to terms in the note.