 | Mark Kolarik is the President of the Kansas Teachers Community Credit Union, located in Pittsburg, KS, since 10-2002 and is a board member of the Kansas Corporate Credit Union located in Wichita, KS . He has been employed in the financial service industry for the last 31 years, having worked in several credit unions for 21years and 10 years in the banking industry. He holds a Bachelor of Business Administration degree from the University of Wisconsin-LaCrosse and is a Certificated Credit Union Executive. |
Banking & Finance
2012-04-20 11:17:20
What do all the financial terms mean - series - part 2
Q: I often hear finance related terms mentioned and do not understand the meaning of many of them. Could you please give a brief definition of the most common financial terms.
A: Last month, we discussed many of the common terms in the financial field. This month we will continue on, getting in depth on some of the less known terminology.
Dividend - A payment made by a company to a stockholder to share in the company’s profits.
Finance Charge - The fee you pay when you do not pay off the entire credit card debt within a single payment period, usually about 25-28 days.
Insured Savings - Accounts that are insured up to $250,000 by a federal insurance agency (NCUA-credit unions or FDIC-banks).
Interest - The amount paid by a borrower to a lender for the privilege of borrowing the money.
Interest Rate - The price paid for the use of someone else’s money expressed as an annual percentage rate, such as 6.5%.
Money Market Account - A form of a savings account. The account typically requires 1) a minimum deposit and 2) that you maintain a minimum balance. The account may pay a rate of interest that rises and falls with the economy.
Mutual Fund - A savings fund that uses cash from a pool of savers to buy a wide range of securities, like stocks, bonds, and real estate. This is a way to diversify investments because you own small units of each of the fund’s investments. The fund is managed by professionals and permits small amounts of money to be invested.
Return - The amount of money a saver receives from a savings account or fund. The return is usually talked about as a percentage, such as “This account returns 7.37%.”
Share - A unit of ownership in an investment or a company.
Shareholder - Someone who owns stock in a company.
Unearned Income - Money you make that is not the result of your labor, such as interest from a savings account or other kind of investment.
Variable Expenses - Kinds of spending that can be controlled and typically change from month to month. For example, groceries can be a variable expense. You can choose to buy expensive food (steak, lobster, lamb chops, or shrimp) or inexpensive food (chicken legs, turkey, hamburger). With variable expenses, you have choices.
Withdraw - To take money out of an account.
