Glossary of Terms for Medical Professionals

5. Accredited Investor — An investor meeting income or net-worth standards allowing investment in private offerings.
6. Adjustable-Rate Mortgage (ARM) — A home loan with variable interest changes over time.
7. Administrator (Estate) — Person appointed to settle an estate when no will exists.
8. After-Tax Contribution — Money contributed after taxes are paid (eligible for tax-deferred or tax-free growth in some cases).
9. Alternative Investments — Non-traditional investments such as private equity, hedge funds, and real estate.
10. Amortization — Scheduled repayment of debt through principal and interest.
11. Annual Percentage Rate (APR) — The total yearly interest cost on borrowed funds.
12. Annual Percentage Yield (APY) — The effective annual return including compounding.
13. Annuity — An insurance contract providing guaranteed income.
14. Asset — Anything with monetary value.
15. Asset Allocation — Strategy of dividing investments across asset classes to manage risk.
16. Asset Protection — Legal planning to shield assets from creditors or lawsuits.
17. Asset Class — A category of investments (stocks, bonds, real estate).
18. Audit — A review of financial statements or tax filings by the IRS or internal body.
19. Backdoor Roth IRA — Strategy allowing high earners to convert after-tax funds to a Roth IRA.
20. Balance Sheet — A financial statement showing assets, liabilities, and equity.
21. Basis Points (BPS) — A unit of measurement equal to 0.01% used in interest or fee changes.
22. Beneficiary — Person or entity designated to receive assets upon death.
23. Beta — Measure of investment volatility relative to the market.
24. Bond — A loan made to a company or government in exchange for interest payments.
25. Bookkeeping — Recording business income and expenses.
26. Budget — A plan to track and manage income and spending.
27. Buy-Sell Agreement — Legal agreement governing ownership transfer in businesses upon death or exit.
28. Capital Gains — Profit from selling an investment or asset.
29. Capital Gains Tax — Tax charged on investment profits.
30. Capital Loss — Loss from selling an asset for less than it cost.
31. Cash Balance Plan — A defined benefit retirement plan for high-income earners with large tax deductions.
32. Cash Flow — Money moving in and out of a business or household.
33. Cash Surrender Value — Amount received when canceling a cash-value life insurance policy.
34. Charitable Remainder Trust (CRT) — Allows tax-advantaged giving while receiving income.
35. Charitable Giving — Donations eligible for tax deductions within IRS limits.
36. Claim (Insurance) — Request for payment under an insurance policy.
37. Co-Insurance — Shared percentage of medical costs after deductible is met.
38. Collateral — Property pledged to secure a loan.
39. Compound Interest — Earning interest on principal and previously earned interest.
40. Contribution Limit — Maximum allowed deposit to tax-advantaged accounts.
41. Conversion (Roth) — Moving funds from pre-tax to Roth accounts; taxable event.
42. Cost Basis — The original value of an investment used to calculate gains or losses.
43. Cost Segregation — Accelerated depreciation for real estate to reduce taxes.
44. CPA (Certified Public Accountant) — Licensed professional specializing in accounting and taxation.
45. Creditor — Entity owed money.
46. Credit Score — Rating indicating creditworthiness based on borrowing history.
47. Death Benefit — The payout from a life insurance policy to beneficiaries.
48. Debt-to-Income Ratio — Comparison of income to debt obligations.
49. Deduction (Tax) — Amount subtracted from taxable income.
50. Defined Benefit Plan — Employer-funded retirement plan providing guaranteed lifelong benefits.
51. Defined Contribution Plan — Retirement plan funded by employee and/or employer contributions.
52. Dependent — Someone financially supported and eligible for tax credit considerations.
53. Depreciation — Annual deduction for loss of value on business or real estate assets.
54. Disability Insurance — Coverage replacing income if illness or injury prevents working.
55. Diversification — Spreading investments to reduce risk.
56. Dividend — Profit distribution to shareholders.
57. Dollar-Cost Averaging — Investing at regular intervals to reduce market timing risk.
58. Donor-Advised Fund (DAF) — Account allowing charitable donations with immediate tax deduction.
59. Down Payment — Initial upfront cost when purchasing property.
60. Durable Power of Attorney — Authorizes someone to manage financial affairs if incapacitated.
61. EBITDA — Earnings before interest, taxes, depreciation, and amortization; common practice valuation metric.
62. Emergency Fund — Savings reserved for unexpected expenses or job loss.
63. Employee Stock Ownership Plan (ESOP) — Allows employees to own company stock.
64. Employer Match — Company contributions to employee retirement plans.
65. ERISA — Federal law protecting retirement plan participants.
66. Escrow — A third-party account holding funds for a transaction or taxes.
67. Estate — Total of assets and liabilities left after death.
68. Estate Plan — Legal structures defining distribution of assets and directives.
69. Estimated Taxes — Quarterly tax payments required for many high-income earners.
70. Fiduciary — Person obligated to act in the best interest of a client.
71. Financial Advisor — Professional guiding financial planning, investments, and risk strategies.
72. Financial Independence — When investment income covers living expenses.
73. Fixed Annuity — Guaranteed fixed-return annuity contract.
74. Fixed Income — Investments generating regular interest payments such as bonds.
75. Foreclosure — Legal process of mortgage lender repossessing property.
76. Forbearance — Temporary postponement of loan payments.
77. FSA (Flexible Spending Account) — Employer account for medical expenses, use-it-or-lose-it rules apply.
78. Full Retirement Age (FRA) — Age when full Social Security benefits are available.
79. Future Value — Value of an investment at a future date with compounding.
80. Gift Tax — Tax on transferring money or property above exclusion limits.
81. Grace Period — Extra time to pay before penalties apply.
82. Gross Income — Total income before taxes and deductions.
83. Growth Stocks — Companies expected to grow at above-average rates.
84. Guardian (Estate) — Person legally responsible for a minor child.
85. Healthcare Directive — Instructions for medical treatment if incapacitated.
86. Health Savings Account (HSA) — Tax-advantaged account for medical expenses.
87. Hedging — Strategy to reduce investment risk.
88. High-Yield Savings Account — Account offering above-average interest rates.
89. Holding Period — Length of time an investment is owned.
90. Home Equity — Market value minus outstanding mortgage.
91. Income-Driven Repayment (IDR) — Federal student loan repayment based on income.
92. Income Statement — Measures revenue, expenses, and profit over time.
93. Index Fund — Fund tracking a market index such as the S&P 500.
94. Inflation — Increase in prices reducing purchasing power.
95. Inheritance — Assets passed to heirs after death.
96. Interest — Cost of borrowing money or earnings for lending.
97. Interest-Only Loan — Payments cover interest but not principal initially.
98. Internal Rate of Return (IRR) — Annualized rate of investment return.
99. Investment Grade — High credit rating bonds considered lower risk.
100. IRA (Individual Retirement Account) — Tax-advantaged personal retirement account.
101. Joint Account — Bank or investment account shared by two or more people.
102. Junk Bond — High-yield, high-risk corporate bond.
103. Key Person Insurance — Protects a business if an essential partner dies.
104. K-1 — Tax form showing income for partnerships and S-corporations.
105. Liability — A legal or financial obligation.
106. Life Insurance — Pays death benefit to beneficiaries.
107. Liquidity — Ability to convert an asset into cash quickly.
108. Loan Forgiveness — Legal cancellation of debt under qualifying conditions.
109. Long-Term Care Insurance — Covers costs of assisted living or nursing care.
110. Lump Sum Distribution — One-time payout withdrawing retirement assets.
111. Marginal Tax Rate — The rate paid on the next dollar earned.
112. Market Volatility — Fluctuations in investment value.
113. Medicare — Federal health program for ages 65+.
114. Mutual Fund — Pooled investor fund managed by professionals.
115. Net Income — Income after taxes and deductions.
116. Net Worth — Assets minus liabilities.
117. Non-Qualified Deferred Compensation — Plans allowing earnings to grow tax-deferred for high earners.
118. Non-Recourse Loan — Lender can only claim collateral, not personal assets.
119. Passive Income — Earnings requiring minimal ongoing effort.
120. Pension — Employer-provided lifetime retirement income.
121. Portfolio — Combined collection of investments.
122. Power of Attorney — Legal right to act on someone’s behalf.
123. Preferred Stock — Stock offering dividends before common shareholders.
124. Pre-Tax Contribution — Reduces taxable income today, taxes deferred.
125. Premium (Insurance) — Cost of insurance coverage.
126. Principal — Original amount of an investment or loan.
127. Probate — Court process handling estates and validating wills.
128. Profit Sharing Plan — Employer contributions based on company profits.
129. Property Tax — Tax on real estate property ownership.
130. Rebalancing — Adjusting a portfolio back to target allocation.
131. Refinancing — Replacing a loan with better terms.
132. Required Minimum Distribution (RMD) — Mandatory withdrawals from retirement accounts.
133. Return on Investment (ROI) — Measures investment profit relative to cost.
134. Risk Tolerance — Ability and comfort accepting investment risk.
135. Roth IRA — Retirement account funded with after-tax dollars, grows tax-free.
136. S-Corporation — Business structure offering pass-through income taxation.
137. SEP IRA — Retirement plan for self-employed and small business owners.
138. Simple IRA — Employer retirement plan for smaller companies with contributions.
139. Social Security — Federal retirement income program.
140. Stock — Ownership share in a company.
141. Student Loan Refinancing — Replacing existing loans with lower rates.
142. Tax Bracket — Range of taxable income taxed at a specific percentage.
143. Tax Credit — Dollar-for-dollar reduction of tax owed.
144. Tax Deduction — Reduces taxable income.
145. Tax Deferred — Taxes postponed to a future date.
146. Term Life Insurance — Life insurance coverage for a set number of years.
147. Trust — Legal arrangement to hold and manage assets.
148. Umbrella Insurance — Extra liability coverage above standard policies.
149. Vesting — Earning the right to employer retirement contributions over time.
150. Will — Legal document expressing wishes for asset transfer and guardianship.