Annuity
A form of life insurance which operates to provide retirement income. The person who takes out the annuity pays the life office a lump sum and in return receives a series of payments.
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When it comes to finances, there are a lot of terms that can be confusing for people who are not familiar with the industry. This glossary is designed to provide clarity on some of the more commonly used terms.
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A form of life insurance which operates to provide retirement income. The person who takes out the annuity pays the life office a lump sum and in return receives a series of payments.
Average weekly ordinary time earnings – a measure of average wages.
A measure of the price volatility of a security or portfolio, compared with the market as a whole.
A debt security issued by entities such as:- corporations, Governments or their agencies (eg. statutory authorities). A bond holder is a creditor of the issuer and not a shareholder.
When a company makes a call on shares it asks the holders of partly paid shares to contribute more money. A call in futures trading refers to a ‘margin call’. Funds can be placed on the money market ‘at call’ which means they have not been lodged for a fixed term.
The value of an investment in a house or business, represented by total assets less total liabilities.
Consumer Price Index. A measurement taken quarterly of movements in the prices of a fixed list of goods and services. The CPI is used as a guide in adjusting award wages and other costs, which are linked to the inflation rate.
Failure to meet a debt obligation.
Financial tool which enables investors to obtain returns from an investment in a market or a particular security without physically purchasing that security. They generally require a small deposit, can usually be bought or sold more quickly than physical securities and are generally much cheaper to transact. Derivatives can be used as a risk management tool or to speculate. They can provide key benefits in that they can improve liquidity and reduce transaction costs.
The reduction in the percentage of equity owned by a company’s founders and existing shareholders as a result of a new financing round. The new round brings in new shareholders which dilutes the percentage ownership of current shareholders.
Tadros Financial Planning & Advice Pty Ltd (T/A Innovative Financial Services) is a Corporate Authorised Representative (No. 1253426) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969.
Australian Financial Services Licence No. 223135.
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