The language of money, investing and business is the language of accounting, which is the systematic and comprehensive recording of financial transactions pertaining to a person, partnership or business. It includes the process of summarizing, analyzing and reporting these transactions to the persons managing the finances, as well as government and tax agencies. Accounting is one of the key functions of business and depending on the size and volume of transactions, it may be handled by a bookkeeper, accountant or teams of bookkeepers and accountants.
Category: Money & Wealth
1. The difference between the price of a product or service and the cost of producing it. The price is determined by what customers are willing to pay based on their perceived value. Value is added or created in different ways. 2. The extra features of a product, service, or person that go beyond the standard expectations and provide something more, even if the cost is higher to the client or purchaser. Value-added features give companies a competitive edge and allow them to charge higher prices than their competitors.
1. The materialism and overconsumption in affluent communities that is harmful to the environment and society. Includes large-scale consumer debt, product waste, and greed. The relentless pursuit of financial success leaves them unfulfilled and unsatisfied, craving more wealth, while unable to get lasting pleasure from material things. Consumption and acquisition dominate their time and thoughts to the detriment of personal relationships and wellbeing. 2. The guilt, depression or lack of motivation experienced by people who have made or inherited large amounts of money and who no longer need to work. Endless increases in material wealth without a clear and compelling purpose may lead to feelings of worthlessness and dissatisfaction rather than experiences of a better life.
1. A tax deduction for the gradual consumption of the value of an intangible asset. For example, if a company spends $10 million on a 10-year license, it amortizes the expense by deducting $1,000,000 from its taxable income per year for 10 years. Often used interchangeably with depreciation, which is the same thing for tangible assets. 2. The spreading of loan repayments over a given period of time.
1. Somebody or something that is useful and contributes to the success of something. 2. A property to which a value can be assigned. 3. The property that is owned by a particular person or organization. 4. The property of a person that can be taken by law for the settlement of debts or that forms part of a dead person’s estate. 5. The items on a balance sheet that constitute the total value of an organization.
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:
- Equities (stocks): Owning a share of a company.
- Fixed Income (debt): Lending money to a company or government for interest.
- Cash or equivalents: Money in bank accounts, or in your pocket, foreign exchange.
- Real Estate: Owning something physical like property.
- Commodities: Natural resource commodities and precious metals like gold, platinum, silver, etc.