Debt Consolidation
Home Loan
Credit Card Debt
Bankruptcy
Mortgages
Financial Glossary 2
CAPITAL NEEDS
In personal financial planning, the amount of capital (assets or cash) needed in a lump sum to enable one to meet income needs and expenses should death or disability occur.
CASH FLOW
The process
of money coming in from various sources (income)
and being spent on various uses (expenses). A cash flow statement is a
look at both the income and the expenses over any period of time, but
is usually for at least a month and/or a year.
CASH SURRENDER VALUE
The actual value
of your life insurance policy. It is the amount of cash you would receive
if you voluntarily terminate your policy before it matures. It is also
the amount that can be borrowed from your
policy while still keeping the policy in force. This value can be found
in the policy contract. It may be more than the contract value as it can
be increased by dividends and interest on dividends that are left to accumulate
(dividend deposits).
COMMON STOCK
Securities that represent an ownership interest in a corporation. Generally have dividend and appreciation potential.
COST PER THOUSAND
Refers to the cost of each thousand dollars of life insurance protection.
CURRENT ASSETS
Those assets
that can easily be converted into cash or sold in a short period of time.
Example: stocks, certificates of deposit, cash value of life insurance,
and money market funds. Also known as liquid assets.
DEBT
A sum owed to
someone else, either a financial or personal obligation;
a state of owing.
DIVERSIFICATION
Spreading money
among different types of investments.
DIVIDEND
The payment
designated by a corporation to be distributed pro rata among outstanding
shares of stock. Corporations usually declare divi-
dends from their profits, and the amount is in relation to the amount
of the profit.
DIVIDEND ELECTION
The method you
choose to receive your dividends. Most commonly refers to life insurance.
You may elect dividends to be paid in
cash, to reduce premiums, to buy paid-up additions, or to accumulate at
interest.
DOLLAR COST AVERAGING
A method of
purchasing securities at regular intervals with a fixed amount of dollars,
regardless of the prevailing prices of the securities. Payments buy more
shares when the price is low and fewer shares when it rises. Because of
the fluctuations of the market, this method
enables an investor who consistently buys in both good and bad times to
be able to improve his potential for a gain when he sells. It is an effective
method for a single investor to strategically invest his money.