Whole Life Insurance

A high-cost option for permanent life insurance that includes a death benefit and an additional saved amount to the covered person or their beneficiary at a guaranteed rate of growth.

Universal Life Insurance

A type of permanent life insurance. As permanent life insurance, it includes cash benefits to the covered person, but the amount of the benefit to the policyholder relies on market performance. The death beneficiary receives a set amount.

Permanent Life Insurance

A category of life insurance that doesn't expire. It also accrues cash value over time which the covered person may use at a later date.

Term Insurance

A type of life insurance that covers a person for a set period of time.

Annuity

An annuity is an insurance product that's used as an income stream for retirees.

Registered Investment Advisor

A registered investment advisor (or RIA) isn't a term for a professional—it's actually a term for a firm operating under fiduciary requirements. Employees of an RIA firm are called Registered Investment Advisor Representatives.

Investment Advisor

An investment advisor gives advice on investment decisions. There are different licenses advisors can hold, and some hold multiple licenses at once. The obligation advisors have towards clients varies by license.

Tax Loss Harvesting

Tax loss harvesting is a practice advisors and investors often employ to avoid excessive taxes on money made quickly in the stock market.

Initial Public Offering

An initial public offering (also called an IPO) is a transition a company makes when it becomes publicly owned via the stock market.

Ticker Symbol

A ticker symbol is a few letters and/or numbers that symbolize an individual stock. They can be abbreviations or acronyms, but are also sometimes randomly selected.

Compound Interest

"Interest on interest" — the money you make from interest makes your saved amount bigger over time, which means you'll make an even larger sum from interest the next year. Each year the growth of "interest on interest" spikes higher.

Diversification

Diversification refers to keeping your assets balanced, both across asset classes and within asset classes. A diverse portfolio means less risk.

Alternative Asset Class

Alternative asset classes are any asset class outside the four major classes (stocks, bonds, real estate, and cash).

Security and Exchange Commission

The SEC is the government organization that regulates the investing industry.

Fiduciary

A fiduciary is also an investment manager or investment advisor (RIA for short), but not all managers/advisors are fiduciaries. The term fiduciary communicates the advisor's formal obligations. A fiduciary is required to act only in the client's best interests.‍

Investment Manager

An investment manager is someone who is licensed to manage clients assets and advise them how to invest their capital.

Stock

A stock (also known as a security) is a type of asset. Stocks are bought and sold on the public stock exchange.

Return

A return is the amount of money you make from investing a particular asset or set of assets.

Risk

Investment risk is equivalent to how likely it is to achieve the outcome (or returns) that you're hoping for.

Asset Class

An asset class is a category of assets, such as stocks. There are four major asset classes and many more alternative asset classes.

Asset

Something that you purchase which you expect to have greater value in the future. Your investment portfolio is made up of individual assets.

Investing

Investing is the act of putting your time, effort or capital at risk, expecting that you'll get something of greater value in return.