Term Of The Day (Investment Related)

Credit Limit
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% Q* n: {1 p& ~7 k# XThe amount of credit that a financial institution extends to
a client. Credit limit also refers to the maximum amount a
credit card company will allow someone to borrow on a single
card. Credit limits are usually determined based on information
( o; ^% o0 M; E  C( r! kcontained in the application of the person seeking credit, or
! @) n3 F9 q4 t- U, `2 Xthat person's credit rating.

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A debt instrument that is secured by the collateral of
% H9 V% V7 D2 B0 S3 Y4 Wspecified real estate property and that the borrower is obliged
- T# |" i3 Y4 @  r) Hto pay back with a predetermined set of payments. Mortgages
are used by individuals and businesses to make large purchases
* X. m4 z; j7 ~: nof real estate without paying the entire value of the purchase
  E8 ^& S, P+ r* N( aup front.

% Q2 D* _8 q$ q' KMortgages are also known as "liens against property" or "claims
on property".

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1. A contractual agreement in which a borrower receives
9 O$ V4 R. T" g% Y9 |* esomething of value now and agrees to repay the lender at some
* r) Y. t% g* sdate in the future, generally with interest. The term also
refers to the borrowing capacity of an individual or company.
, k' f; p2 U6 W
2. An accounting entry that either decreases assets or increases
liabilities and equity on the company's balance sheet. On the
: Z! c, f$ E) U+ J8 {company's income statement, a debit will reduce net income,
while a credit will increase net income.

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- i; k- Q3 k4 Y0 M) |$ OThe one-year period that begins on January 1 and ends on
5 B- q2 K7 D1 q* I3 DDecember 31, based on the commonly used Gregorian calendar.
. v& m2 |$ Q' s% M9 L4 X, h% UFor individual and corporate taxation purposes, a calendar
' ]. ~; p* D( y/ G9 ^year will generally comprise all of the year's financial
4 R4 `) P/ @/ Y' ]& n0 z7 l0 Q1 k0 zinformation used to calculate income tax payable.

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An estimation of the revenue and expenses over a specified
future period of time. A budget can be made for a person, family,
group of people, business, government, country,  multinational
organization or just about anything else that makes and spends
4 r' T) Q$ l$ G4 W3 ^! ]money. A budget is a  microeconomic concept that shows the
tradeoff made when one good is exchanged for another.

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7 K% f$ t9 X( u. c* {9 WAn investor who is willing to take on additional risk for an
  I! [/ w5 ?' E0 [9 \3 b( @9 zinvestment that has a relatively low expected return. This
1 h. O( \* @5 \  ?& k1 }contrasts with the typical investor mentality - risk aversion.
Risk averse investors tend to take on increased risks only if
7 h; [' [' N' M% V$ q5 a, Vthey are warranted by the potential for higher returns.

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A situation in which the supply and demand for a good or
; }9 H& t( M' `/ t% P& k* uservice can vary significantly due to the price. The elasticity
  @2 j( l6 ~8 q6 i2 F+ Q2 Cof a good or service can vary according to the amount of close
2 r) i6 l4 s: u4 v/ m; Msubstitutes, its relative cost and the amount of time that has
elapsed since the price change occurred.

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- Y9 d, |. `4 ~A working-class person historically defined by hourly rates
of pay and manual labor. A blue collar worker refers to the
fact that most manual laborers at the turn of the century wore
# g9 e) P* w7 J5 _) G5 j& gblue shirts, which could hold a little dirt around the collar
without standing out.
- @" S) f9 k  X$ s2 C& @2 @" x
This working class stands in contrast to white collar workers,
4 x/ L. @# g$ n! R$ pwhich historically have had the higher-paying, salaried positions
& e7 L  G+ m/ H' h/ f: ito go with their clean and pressed white shirts.

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9 R% u- l# p; t8 }4 T8 M1 @A phrase commonly used in personal finance and retirement
planning literature that means to automatically route your
1 C- r( ~  R2 Z2 H8 t6 `! Yspecified savings contribution from each paycheck at the time
" B5 f7 C) _# C4 F7 jit is received.
  Z3 m5 [: g4 m) ?8 C9 T
& y" b  x( J8 s9 N. @2 g. _Because the savings contributions are automatically routed
from each paycheck to your investment account, this process
is said to be "paying yourself first", or before you begin
) i6 r8 G: u! s5 @paying your monthly living expenses and making discretionary
purchases.

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6 P$ j6 X* z$ \9 ]The income of an individual or group after taking into
" W8 o7 T: c1 a" G; [' y9 c# S7 t5 {4 xconsideration the effects of inflation on purchasing power.
For example, if you received a 2% salary rise over the previous
year and inflation for the year was 1%, then your real income
only rose 1%. Conversely, if you received a 2% raise in salary
and inflation stood at 3%, then your real income would have
+ @2 D  Y; s& T' b! Gshrunk 1%.