Category: Money & Wealth Page 5 of 14

1. The process of applying a small force that multiplies into a large effect. 2. The action of a lever. 2. The mechanical advantage or power gained by using a lever. 3. Power or ability to act effectively or to influence people. 4. The use of a small initial investment to gain a relatively high return. Using a small amount of your own money to make an investment of much larger value, thus gaining significant financial power. For example, if you borrow 80% of the cost of a property, you are using the leverage to buy a much more expensive asset than you could have afforded by paying cash. If you sell the property for more than you paid for it, the profit is yours. The reverse is also true if you sell at a loss, the amount you borrowed is still due and the loss is yours. Buying stock on margin is a type of leverage, as is buying a futures or options contracts. Leveraging can be risky if the underlying asset doesn’t perform to your expectations.

A vehicle is a medium for the expression, communication, or achievement of ideas, information, power, goals or objectives. Therefore, an Investment Vehicle is a medium for the achievement of investment objectives. Different vehicles suit different purposes, just like automobiles can be chosen for comfort, speed, reliability, endurance, road conditions, retaining value, prestige, etc. an investment has attributes that accomplish certain goals. Balancing the investment timeframe, risk profile, expected return, capital growth vs income, enables an investor to select a vehicle that matches their exact profile. For example, if your investment plan involves a target monthly income goal, then you will select a very different vehicle than you would if capital growth was your objective.

Intangible assets that are products of the intellect that is the result of creativity, with commercial value including trademarks, copyrighted property such as literary or artistic works, patents, business methods, ideas, know-how, systems, and industrial processes, etc.

An Initial Public Offering is the open sale of shares in a company prior to the company being listed on a stock exchange and traded publicly for the first time.

Financial contracts obligating the buyer to purchase an asset and a seller to sell an asset at a predetermined future date and price.

The investigation of an asset, or investment to ensure that everything is as it seems. Helps the buyer or investor make sure that there are no unexpected problems with the investment and that they are receiving fair value. The process can be informal research or complex and formal. For example, when buying a house, due diligence involves time-consuming and often expensive inspections and reports.

1. The act of deflating or state of being deflated. 2. A reduction in the level of total spending and economic activity resulting in lower levels of output, employment, investment, trade, profits, and prices.

1. Something useful that can be turned to commercial advantage. 2. A product or service that is indistinguishable from ones manufactured or sold by competing companies and therefore sells primarily on the basis of price rather than quality or style. 3. Any unprocessed or partially processed good or resource, for example, grain, fruit, vegetable, or precious metal.

1. The value of an asset on a company’s balance sheet, which is often different from the amount the asset is worth on the open market. 2. The value of a company’s net assets as per its balance sheet (calculated as assets, less liabilities).

A grouping of similar types of investments which have similar financial characteristics and behave similarly in the marketplace.

There are five main classes which are:

1. Equities (stocks): Owning a share of a company.
2. Fixed Income (debt): Lending money to a company or government for interest.
3. Cash or equivalents: Money in bank accounts, or in your pocket, foreign exchange.
4. Real Estate: Owning something physical like property.
5. Commodities: Natural resource commodities and precious metals like gold, platinum, silver, etc.