Term Of The Day (Investment Related)

Credit Limit
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The amount of credit that a financial institution extends to
$ {% t) f2 Q! t2 Z/ p! Y) Ua client. Credit limit also refers to the maximum amount a
/ `+ P3 z/ _' O6 S& Ccredit card company will allow someone to borrow on a single
card. Credit limits are usually determined based on information
1 @  X& F8 y, B7 V8 qcontained in the application of the person seeking credit, or
that person's credit rating.

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/ v' M4 x( f" s. MA 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
3 t+ c- T* I, e1 {& b2 Cof real estate without paying the entire value of the purchase
) E; ]8 g: X, u$ Z9 a  d/ C- X* F( Tup front.
- D1 U  F) B" [0 h: x
4 t% b7 f7 M# B3 K; {Mortgages are also known as "liens against property" or "claims
" l* l+ ^, }2 F# K- Non property".

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( `. Q6 J" K4 {2 r4 C1. A contractual agreement in which a borrower receives
  S  D# X* |4 c6 Z% O( N6 s- v+ Wsomething of value now and agrees to repay the lender at some
date in the future, generally with interest. The term also
refers to the borrowing capacity of an individual or company.
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2 _8 u; M, W" `* X. @2. An accounting entry that either decreases assets or increases
liabilities and equity on the company's balance sheet. On the
; y. _% X" h  v) ucompany's income statement, a debit will reduce net income,
while a credit will increase net income.

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0 I+ `3 k# A: RThe one-year period that begins on January 1 and ends on
$ L+ b! H' k* K. fDecember 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
1 ]6 n& b9 W5 \& _/ vinformation used to calculate income tax payable.

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; d. T% V* X7 B* C! V0 c5 n  B. u7 L& oAn 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
# s' S$ ?9 r- p3 `5 h) Pmoney. A budget is a  microeconomic concept that shows the
tradeoff made when one good is exchanged for another.

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, n  ~7 d: M2 g. h( R! j& FAn investor who is willing to take on additional risk for an
investment that has a relatively low expected return. This
contrasts with the typical investor mentality - risk aversion.
Risk averse investors tend to take on increased risks only if
+ e" `: w6 Z% a- hthey are warranted by the potential for higher returns.

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A situation in which the supply and demand for a good or
' \  k# S$ j2 c$ m$ Nservice can vary significantly due to the price. The elasticity
of a good or service can vary according to the amount of close
3 a5 w' l0 r  v/ c0 [) l$ v" jsubstitutes, its relative cost and the amount of time that has
/ k" D+ t" y( n0 ielapsed since the price change occurred.

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% }( c) p# O- q5 a  b" W& b* ?) b( n, rA working-class person historically defined by hourly rates
7 a, ^1 X1 H0 f  C; ^of pay and manual labor. A blue collar worker refers to the
, q; \7 ]  P! t( w2 s8 vfact that most manual laborers at the turn of the century wore
blue shirts, which could hold a little dirt around the collar
8 n8 C* d. c* w3 Zwithout standing out.
( ]8 w' p- |2 \4 i
# H) |- j/ h- a% f3 L9 j5 [This working class stands in contrast to white collar workers,
which historically have had the higher-paying, salaried positions
7 I) U9 P/ `; N( H0 f6 o( Lto go with their clean and pressed white shirts.

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# d2 N! U2 \) uA phrase commonly used in personal finance and retirement
# m. l* K" ]5 r5 W, I! E! ~planning literature that means to automatically route your
  q' o  a; D. I4 A, [& ~% t8 Yspecified savings contribution from each paycheck at the time
- Q* b3 z* q% |# @it is received.
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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
" _6 m6 @- E: V/ ?* j9 A; F2 ?) M! ^paying your monthly living expenses and making discretionary
' L. R2 X+ j9 b8 spurchases.

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The income of an individual or group after taking into
5 S( ~% M! O+ U7 wconsideration 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
5 V4 ]$ ?. ]8 Oonly rose 1%. Conversely, if you received a 2% raise in salary
and inflation stood at 3%, then your real income would have
9 j, m6 v3 Z9 m5 vshrunk 1%.