Term Of The Day (Investment Related)

Credit Limit
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6 ~# \+ p! e1 D& o$ S4 `/ {The amount of credit that a financial institution extends to
& b/ P+ G4 T0 z1 H1 Z1 la client. Credit limit also refers to the maximum amount a
credit card company will allow someone to borrow on a single
0 D" R1 t8 B" z& [; I! }6 m* W% Acard. Credit limits are usually determined based on information
contained in the application of the person seeking credit, or
that person's credit rating.

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A debt instrument that is secured by the collateral of
specified real estate property and that the borrower is obliged
to pay back with a predetermined set of payments. Mortgages
are used by individuals and businesses to make large purchases
of real estate without paying the entire value of the purchase
up front.

Mortgages are also known as "liens against property" or "claims
on property".

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1. A contractual agreement in which a borrower receives
0 q5 F% I  s! K1 }5 Q3 Esomething of value now and agrees to repay the lender at some
date in the future, generally with interest. The term also
3 b# M$ W2 b! L' \7 Z3 i7 u/ B1 ?refers to the borrowing capacity of an individual or company.

2. An accounting entry that either decreases assets or increases
: T% @4 K% b! ^- p4 L0 yliabilities and equity on the company's balance sheet. On the
company's income statement, a debit will reduce net income,
while a credit will increase net income.

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2 I* l% G* J! `0 Q# U" P9 AThe one-year period that begins on January 1 and ends on
' F0 l4 V( _7 dDecember 31, based on the commonly used Gregorian calendar.
For individual and corporate taxation purposes, a calendar
year will generally comprise all of the year's financial
: s  t/ F/ A! D; x3 p/ Binformation used to calculate income tax payable.

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4 U- r1 w2 D) SAn estimation of the revenue and expenses over a specified
future period of time. A budget can be made for a person, family,
3 I5 [1 r& S6 X8 v% sgroup of people, business, government, country,  multinational
organization or just about anything else that makes and spends
3 g+ P; ~" P" Mmoney. A budget is a  microeconomic concept that shows the
tradeoff made when one good is exchanged for another.

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An investor who is willing to take on additional risk for an
' G  I, p+ N3 h8 ^& yinvestment that has a relatively low expected return. This
7 r- G0 R. R7 [* bcontrasts with the typical investor mentality - risk aversion.
Risk averse investors tend to take on increased risks only if
1 u) N) \  [5 R* }& kthey are warranted by the potential for higher returns.

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A situation in which the supply and demand for a good or
service can vary significantly due to the price. The elasticity
of a good or service can vary according to the amount of close
substitutes, its relative cost and the amount of time that has
+ G& W" \8 A( y" I& X- g: pelapsed since the price change occurred.

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3 a4 p% h" g1 w6 k5 }. o( S& X" tA working-class person historically defined by hourly rates
7 N% ]3 q/ p0 b% |of pay and manual labor. A blue collar worker refers to the
1 j6 Q& s: k# s, I$ t# gfact that most manual laborers at the turn of the century wore
" ~2 _3 ^! g& Q1 G0 ^. `+ zblue shirts, which could hold a little dirt around the collar
without standing out.

This working class stands in contrast to white collar workers,
6 Y* `7 I+ y) ?. c; l; H! rwhich historically have had the higher-paying, salaried positions
6 V( {2 `* q  c% |to go with their clean and pressed white shirts.

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A phrase commonly used in personal finance and retirement
planning literature that means to automatically route your
specified savings contribution from each paycheck at the time
7 I% u5 x) a" C& sit is received.

2 `' E* M; Y3 uBecause the savings contributions are automatically routed
* g4 o& ]" }( P" ?: g1 ^) Lfrom each paycheck to your investment account, this process
5 n0 l- b: I8 K0 e/ z5 ^" dis said to be "paying yourself first", or before you begin
( k1 n- i: x- Z0 i" k: t7 ~6 ~paying your monthly living expenses and making discretionary
purchases.

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8 o# ?4 i) q" t" @The income of an individual or group after taking into
consideration the effects of inflation on purchasing power.
For example, if you received a 2% salary rise over the previous
5 v+ o7 o: U$ @* c( u- Q" ]year and inflation for the year was 1%, then your real income
, p% k! S% Y8 G2 ?) q  w9 l6 E- uonly rose 1%. Conversely, if you received a 2% raise in salary
0 C+ Y5 K! d+ _2 f; Mand inflation stood at 3%, then your real income would have
shrunk 1%.