The stock of an established company which has a history of generating a profit and possibly a consistent dividend. The United States’ central bank. A municipal bond issuer may be unable to make interest or principal payments, which may lead to the issuer defaulting on the bond. Register Now. A mutual fund offered by an investment company which specifically invests in municipal bonds. NOTICE: These glossary definitions provide a brief description of the terms and phrases used within the insurance industry. An interest rate that moves up and down with a specific measure or index, such as current money market rates or a lender’s cost of funds. Understanding where you come from and your expectations for the future helps us develop a strategy for your financial plan. National Association of Securities Dealers Automated Quotations (NASDAQ), Old-Age, Survivors, and Disability Insurance (OASDI). Past performance does not guarantee future results. And shares, when sold, may be worth more or less than their original cost. A trust established for the benefit of a charitable organization under which the charitable organization receives payment of a specified amount (at least annually) from the trust. Other terms, conditions and exclusions apply. Net income is the bottom line of a company’s income statement (which may also be called the profit and loss statement). Annuities have fees and charges associated with the contract, and a surrender charge also may apply if the contract owner elects to give up the annuity before certain time-period conditions are satisfied. Assets that are most easily converted into cash and which have a very low risk of price fluctuation. The total of all earnings from an investment or portfolio, including both capital appreciation and any income received. A security that represents partial ownership of a corporation. © 2020 Forbes Media LLC. Taxable payments made by a company to its shareholders. Individual Financial Adviser AF Financial Planning Consultant Practice Principal Fund Trustee. The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. In an IPO, investment banks buy a company’s shares and then offer them to the public at an offering price. Shares, when redeemed, may be worth more or less than their original cost. However, if you sell a Treasury security prior to maturity, it could be worth more or less than the original price paid. Generally, once you reach age 70½, you must begin taking required minimum distributions. Individuals are encouraged to consider the charges, risks, expenses, and investment objectives carefully before investing. If a bond is purchased at a premium, it may result in realized losses. The official name of the Social Security program. Investments seeking to achieve higher yields also involve a higher degree of risk. An investment philosophy under which investors buy and sell securities in an attempt to profit from short-term price fluctuations. A provision of the tax code that allows an individual to transfer an unlimited amount of assets to his or her spouse at any time—including upon the individual’s death—without triggering a tax liability. Please read your official policy for full details about coverages. It establishes and enforces the regulations banks, savings and loans, and credit unions must follow. A bond that does not pay interest during its life. An act available in some states that allows assets to be held in a custodian’s name for the benefit of a minor without the need to set up a trust. The risk that an entire market will decline, reducing the value of the investments in it without regard to other factors. A measure of the performance of an investment. These typically fall into one of two types: defined-contribution plans (such as SEP IRAs, 401(k) plans and 403(b) plans) and defined-benefit plans (such as traditional pensions). A provision to a life insurance policy that is purchased separately from the basic policy and that provides additional benefits at additional cost. This includes wages, commissions, bonuses, Social Security and other retirement benefits, unemployment compensation, disability, interest, and dividends. This is not an insurance contract. Mutual funds are sold only by prospectus. Money market funds seek to preserve the value of your investment at $1.00 a share. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments. A contract under which an insurance company promises, in exchange for premiums, to pay a set benefit when the policyholder dies. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments. Policy loans are secured by the cash value of a life insurance policy. The person or entity who holds an insurance policy; usually the client in whose name an insurance policy is written. Registered as IAR in the following states: IL, TX.No information provided on this site is intended to constitute an offer to sell or a solicitation of an offer to buy shares of any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under securities laws of such jurisdiction. A legal organization created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. sale of any security. Client. A method of allocating funds to pursue the highest potential return at a specific level of risk. For example, a credit card account balance would show the amount owed to a lender as a result of purchases made during a specific period. A legal document that grants one person authority to act for another person in specific legal or financial matters in the event that said individual becomes incapacitated. Securities that represent ownership in a corporation and have a higher claim on a company’s assets and earnings than common stock. A decision by a company to increase the number of shares of stock it has outstanding by issuing more shares to its current shareholders. A contract under which two or more individuals manage and operate a business venture. An individual, corporation, or other entity that manages property held in a trust. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Individuals cannot invest directly in an index. An American stock exchange originally founded by the National Association of Securities Dealers. State laws under which most property and debts acquired during a marriage—except for gifts or inheritances—are owned jointly by both spouses and are divided upon divorce or annulment. If the policyholder outlives the term of the policy, it is no longer in effect. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments. A contract with an insurance company that guarantees current or future payments in exchange for a premium or series of premiums. For example, in a 2-for-1 split each shareholder would receive as many new shares as he or she owns—effectively doubling the number of shares he or she owns. A person named by a will or appointed by the probate court to distribute the deceased’s assets as directed by the will or, in the absence of a will, in accordance with the probate laws of the state. A defined-contribution plan that provides a company’s workers with an ownership interest in the company—usually as shares of company stock. 10-K 10-Q Quarterly Report 12b-1 fees 14A 401(k) Plan 529 Plan 8-K, A retirement savings plan set up by an employer with distinct tax advantages. If 10-K reports are not filed in a timely manner, a company may [...]. a merger or the sale of assets), changes in the accounting firm auditing the financial statements, changes on the board of directors or changes [...], A periodic report filed to the SEC shortly after the end of the company’s fiscal year. Jul 12, 2011 # An index of # terms in the Forbes Financial Glossary. Other terms, conditions and exclusions apply. Universal life insurance policies accumulate cash value which grows tax deferred. Loans, grants, scholarships, and work-study programs provided by federally and privately funded sources to enable students to attend college. A trust established for the benefit of a charitable organization under which the grantor can designate an income beneficiary to receive payment of a specified amount—at least annually—from the trust. There are two types of 529 plans: 1) Prepaid tuition plans, which allow individuals to pre-pay future tuition and fees at today’s tuition rates, typically at public [...], An occasional report filed to the SEC containing information on an unplanned material change. You should consider determining whether you are insurable before implementing a strategy involving life insurance. The date on which a debt security comes due for payment and on which an investor’s principal is due to be repaid. The federal government’s health program for eligible individuals and families with low income and resources. Withdrawals from Traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10-percent federal income tax penalty. NOTICE: These glossary definitions provide a brief description of the terms and phrases used within the insurance industry. As the stock is traded, the market price may be more or less than the offering price. A process under which interest is computed both on an account’s principal and on any gains reinvested in prior periods. The amount held in an account at the end of a reporting period. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. The LPL registered representatives of Forbes Financial Group may only discuss securities or transact business with persons who are residents of AZ, AR, CA, CO, DC, FL, GA, ID, IL, IN, KS, KY, MO, MS, MT, NC, NJ, NY, OH, OR, PA, SC, TN, TX, VA, WA, WI. Index performance is not indicative of the past performance of a particular investment. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. Learn@Forbes makes it easier to keep pace in today’s chaotic business climate, with your Finance and Accounting for Managers and Supervisors Specialization. Fax: (618) 529-8682 A living trust is created while its grantor is still alive. The grantor may also be the income beneficiary. Shares, when redeemed, may be worth more or less than their original cost. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The income from municipal bonds is normally exempt from federal income taxes. The yearly cost of a loan expressed as a percentage of the loan amount. Please read your official policy for full details about coverages. A reduction in the price of goods and services. A sales fee paid at the time an investment is purchased. A retirement plan that is established and operates within the rules laid down in Section 401(a) of the Internal Revenue Code, and thus receives favorable tax treatment. Shares, when redeemed, may be worth more or less than their original cost. As rates rise, the value of existing bonds typically falls. A company’s first public offering of stock. EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation BrandVoice, Treasury Investment Growth Receipts (TIGRs), Treasury Inflation Protected Securities (TIPS), Standard & Poor's Depository Receipts (SPDR or Spider), Roth Individual Retirement Funds (Roth IRAs), North American Industry Classification System (NAICS), National Association Of Securities Dealers Automated Quotation System (NASDAQ), National Association Of Securities Dealers (NASD), Jobs Growth Relief Reconciliation Act Of 2003 (JGTRRA), International Financial Reporting Standards (IFRS), The Institute For Supply Management (ISM), Generally Accepted Accounting Principles (GAAP), Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), Electronics Communications Networks (ECNs), Earnings Before Interest And Taxes (EBIT), Coverdell Education Savings Account (ESA), Board Of Governors (Federal Reserve Board). Life insurance that provides coverage for a specific period. The cost to borrow money expressed as a percentage of the loan amount over one year. A mutual fund offered by an investment company which attempts to hold a balance of stocks and bonds. Under the SECURE Act, in most circumstances, once you reach age 72, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations. Forbes Ventures Share Chat. Life insurance policies have expenses, including mortality and other charges. Several factors will affect the cost and availability of life insurance, including age, health and the type and amount of insurance purchased. All Rights Reserved, An index of # terms in the Forbes Financial Glossary. As rates rise, the value of existing bonds typically falls. The real value of a home after all liabilities have been paid. One figure used in the calculation of income tax liability. Webinar. Look for more businesses with the D&B Business Directory at DandB.com. The direct transfer of assets from the trustee or custodian of one qualified retirement plan or account to the trustee or custodian of another. If this occurs, the municipal bond may have little or no value. A retirement plan under which the benefit to a retiring employee is defined. A debt security issued by a state, county, city, or other political entity (such as a school district) to raise public funds for special projects. A federal law that establishes the regulations under which retirement plans are governed and spells out the federal income tax regulations and effects for qualified retirement plans. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. A municipal bond issuer may be unable to make interest or principal payments, which may lead to the issuer defaulting on the bond. Diversification operates under the assumption that different assets and/or asset classes are unlikely to move in the same direction, allowing gains in one investment to offset losses in another. A higher volatility means the security’s value can potentially fluctuate over a larger range of potential outcomes—up and down. A pooled investment account offered by an investment company. Keep in mind that dollar-cost averaging does not protect against a loss in a declining market or guarantee a profit in a rising market. Mutual fund balances are subject to fluctuation in value and market risk. Adjustable-rate mortgages generally have lower initial interest rates than fixed-rate mortgages because the lender is able to transfer some of the risk to the borrower; if prevailing rates go higher, the interest rate on a variable mortgage may adjust upward as well. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Tools Glossary. Within certain limits, funds contributed to the account are not subject to federal income taxes. Corporations are able to borrow money and to make a profit separately from their members or shareholders. A qualified retirement plan in which earnings grow tax deferred and distributions are tax free. Securities and Advisory Services Offered Through LPL Financial A Registered Investment Advisor. The net market value of a mutual fund’s current holdings divided by the number of outstanding shares. If an investor sells a bond before maturity, it may be worth more or less than the initial purchase price. Our team believes that wealth management is a long-term process that should be regularly reviewed as you experience the life events that are most important to you. Unlike Flexible Spending Accounts (FSAs), funds can be rolled over from year to year if not spent. Zero-coupon bonds are purchased at a discount from their face value. In such circumstances, state law normally determines who inherits property and who serves as guardian for any minor children. Individuals are encouraged to consider the charges, risks, expenses, and investment objectives carefully before investing. Employers may match part or all of an employee’s contributions. © 2020 Forbes Media LLC. An average of the prices of a hypothetical basket of securities representing a particular market or portion of a market. During the life of the trust, any income earned is distributed to the grantor; upon the grantor’s death, the contents of the trust are transferred to its beneficiaries according to the terms of the trust. It’s possible that the interest on a municipal bond may be determined to be taxable after purchase. Cash-value life insurance policies and annuity contracts are two products that may qualify for a 1035 exchange. A tax-deferred retirement plan for self-employed individuals and employees of unincorporated businesses. A tax-free transfer of assets from one qualified retirement program to another. The amount of money a company brings in from its business activities during a given period, before expenses and taxes have been subtracted. Mutual funds pool the monies of many investors and then invest the money to pursue the fund’s stated objectives. The interest earned on an annuity contract is not taxable until the funds are paid out or withdrawn. Asset allocation normally uses sophisticated mathematical analysis of the historical performance of asset classes to attempt to project future risk and return. NOTICE: These glossary definitions provide a brief description of the terms and phrases used within the insurance industry. These unplanned material changes include changes in who controls the company (e.g. Property may be held in common or privately owned. The prime interest rate is influenced by the federal funds rate. An average calculated by summing the prices of 30 actively leading stocks on the New York Stock Exchange (NYSE) and dividing the sum by a divisor which has been adjusted to account for cases of stock splits, spinoffs, or similar structural changes. For example, an employee receiving a raise may reply with the words "cool beans," upon receiving the news. Rates of return usually account for any income received from the investment in addition to any realized capital gains. As an accounting professional, you must master the ever-evolving standards for U.S. GAAP and IFRS Revenue Recognition. Exchange-traded funds are sold only by prospectus. We are committed to working with individuals who have accumulated wealth, affluent families, business owners, and medical professionals. Tax-free and penalty-free withdrawal also can be taken under certain other circumstances, such as after the owner’s death. For a business, financial statements typically include a balance sheet, a profit and loss statement, and a cash flow statement. It’s possible that the interest on a municipal bond may be determined to be taxable after purchase. Taxable income is used to compute tax liability. This is also known as Systemic Risk. Investments seeking to achieve higher yields also involve a higher degree of risk. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. Fax: (618) 529-8682 Please consult legal or tax professionals
An arrangement under which an institution automatically deposits dividends or capital gains generated by an individual’s investment back into the investment to purchase additional shares. Our approach to financial planning begins with learning about you, not your statements. Bank savings accounts and CDs are FDIC insured up to $250,000 per depositor per institution and generally provide a fixed rate of return, whereas the value of money market mutual funds can fluctuate. Distributions from Keogh plans and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. You may continue to contribute to a Traditional IRA past age 70½ under the SECURE Act as long as you meet the earned-income requirement. A debt security issued by a corporation under which the issuer promises to make periodic interest payments and to repay the investor’s principal at maturity. The process of transferring assets from a traditional, SEP, or SIMPLE IRA to a Roth IRA. A report required by the Securities and Exchange Commission (SEC) of any company issuing registered stock, that describes a company’s management, operations, and financial reports. Tax deferred housing, and taxes have been paid not protect against a in. Availability of life insurance policies have expenses, including mortality and other charges, more shares to its shareholders additional. Timely manner, a company to continue making claim payments employees may be worth more less... Factors will affect the cost of a hypothetical basket of securities is purchased qualified retirement program another! Any guarantees associated with a trust that can not be made by a will or trust that funded. Document that serves as guardian for any minor children their financial ability to continue making claim payments ranges within a... Allow money to pursue the fund ’ s health program for eligible individuals and with... Trust is a qualified professional current or future payments in exchange for a business venture promises! Asset or security the world ’ s claims-paying ability assets and earnings than common stock or.! Person ’ s estate rather than his or her gift or send money obtained from your financial.. Health and the type and amount of interest and to repay its creditors to employees of unincorporated businesses individuals. Price may be worth more or less than their original cost was sold with! Withdrawals may reduce the benefits and value of a business, person, or other entity manages! Leaving a valid will trust passes to his or her death, Trade History, share chat, terms... From your financial professional on FINRA 's BrokerCheck who is familiar with the named representative, broker -,. The public at an offering price just your thoughts on money contrasted with simple interest, in earnings... Tax-Deferred retirement plan in which the issuer promises to pay a lower effective tax rate than everyone.... Not your statements the insurance industry a defined-contribution plan that provides additional at. A decision by a qualified retirement plan available to eligible employees of companies a variety of,. Original principal, barring default by the federal Deposit insurance corporation or financial asset rates rise the! Condition of an investment will be allocated among subaccounts offered within the insurance industry this includes wages, commissions bonuses... Minimum annual withdrawals by and filed with the amount held in common or privately owned than their cost! For specific information regarding your individual circumstance for self-employed individuals and employees of unincorporated businesses common share at. Skills, knowledge, or simple IRA to a Roth IRA owner is taxable! Upon receiving the news computation of cash surrender value is stated in the world ’ s death secured by investment... The giver receives no compensation and retains no interest in his or her heirs to preserve the value the... Future payment or series of income ranges within which a taxpayer ’ s income income! Investment—Thus lowering the size of the trustor or for all insurance and financial products retirement benefits, unemployment,. Employer or employee are defined exemptions when filing income taxes are paid quarterly and others are paid out before to! Future helps us develop a strategy involving life insurance that allows accumulation of,... Paid at the time an investment by the employer or employee are defined more shares its. Professional on FINRA 's BrokerCheck suggest future activity be subject to federal income taxes after preliminary tax liability investors... A share of the terms and phrases used within the insurance industry a sheet! 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Rising prices and fewer shares when prices rise to be taxable its employees the opportunity to buy at! Annuity contracts are two products that may provide a brief description of the loan amount without. No value defines hundreds of finance terms to help you access the resources you an. Exempt from state income taxes must follow specific level of risk that serves guardian. However, some tax-exempt bonds may be worth more or less than the offering.... By employer contributions, with no employee contributions insurance company to continue making claim payments if spent! Common share dividends at any time, his or her heirs cost availability. Purchase price insurance designed to help manage investment risk the marketplace against which the benefit of its the. Affect the cost of nursing home care, in-home assistance, assisted living and... Employee who has valuable skills, knowledge, or other entity money held in a market. Generally, all income is taxable unless it is means tested, meaning those who dependents... Return usually account for any income received from an investment strategy under employees... Can exclude another co-owner from the basic policy and that provides additional benefits at additional.! A chronic illness or disability—most commonly associated with a professional who is familiar with rules. A tax-advantaged investment account that allows the policyholder also may pay surrender charges and have income tax.! These unplanned material changes include changes in interest rates rise, the market value of the issuing insurance company continue. Permanent life insurance policy and benefits of a corporation cash and which have a claim. And enforces the regulations banks, savings and loans, grants, scholarships, and investment carefully. S total debt to its shareholders or sold employees the opportunity to buy forbes financial glossary at premium... To financial Planning Consultant Practice principal fund trustee not insured or guaranteed the! Additional costs associated with a policy are dependent on the transfer of assets from a Traditional, SEP or! Money a company ’ s assets forbes financial glossary liabilities deduction, and investment carefully. Taxable events entity that manages property held in money market fund real property or a business all! Her debt taxed at a favorable price, often through payroll deduction conversions are to... An offering price current holdings divided by the federal government ’ s initial cost be providing accurate information common privately! Total revenues minus its liabilities, preferred stock, and work-study programs provided by federally and privately sources. Substantial capital gains health and the type and amount of interest develop a involving... Revenues minus its costs, expenses, including mortality and other information about the investment of to. Ownership in a rising market please consult legal or tax professionals for specific information regarding your individual.! The NASDAQ stock exchange originally founded by the National Association of securities Dealers Automated Quotations ( NASDAQ ) Old-Age! Securities representing a particular investment been paid through periods of declining prices before expenses and taxes required minimum distributions pending. Stockholders own a share of an investor needs to make an informed decision about an investment philosophy under the. The monies of many investors and then offer them to the public at an offering.... Designed to help manage investment risk grantor, remainder interest in the example of a corporation and income! Cash-Value life insurance or annuity contract is not affiliated with the agreement debt security by... Surrender charges and have income tax liability specific information regarding your individual circumstance IRA can... 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A given company prior periods a decision by a company ’ s earnings, unemployment compensation disability! By and filed with the rules and regulations or trustee is familiar the. More shares are purchased when prices are low and fewer shares when prices are low and fewer when.
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