富人的语言、词汇.doc

Glossary
A

Accountant: Has a formal accounting education, where a bookkeeper may not. An accountant will handle your day-to-day financial needs including the preparation of your financial statements. Accountants can also prepare tax returns.

Asset: Something that puts money in your pocket whether you work or not. Assets include real estate, businesses, and paper assets such as stocks, bonds and mutual funds.

Agency bonds: The most popular and well-known are the bonds of mortgage associations, nicknamed Ginnie Mae, Fannie Mae and Freddie Mac. But many federal and state agencies also issue bonds to raise money for their operations and projects.

Adjustable rate mortgage: A mortgage loan whose interest rate changes periodically over the period of the loan.

Amortization: Gradual repayment of a debt by periodic installments that cover both principal and interest.

Annual percentage rate (APR): The effective rate of interest for a loan. The APR reflects all the costs of financing - including points, origination fees, and other finance charges - and is usually higher than the interest rate alone.

Amex (American Stock Exchange): The rival New York Curb Exchange was founded in 1842. It's name said it all: trading actually took place on the street until it moved indoors in 1921. In 1953, the Curb Exchange became the American Stock Exchange.

Appraisal: A estimate or opinion of the value of a property by an impartial person skilled in the analysis and valuation of real estate.

Assumable loan: An existing loan on a property that the seller is able to pass on to the borrower. Back to Top

B

Bonds: May be tax-free Municipal Bonds, U.S. Government issued Treasuries or Corporate Bonds which reflect debt by the issuing authority in exchange for interest payment to the purchaser.

Bookkeeper: Keeps track of your bookkeeping records. In most cases you'll want a "full charge" bookkeeper - one who can pay bills, properly code them, track accounts receivable and payable, do payroll and prepare financial statements and tax returns.

Blue chips stocks: Is a term borrowed from poker, where the blue chips are the most valuable, and refers to the stocks of the largest, most consistently profitable corporations. The list isn't official - and it does change.

Book value: Is the difference between the company's assets and liabilities. A small or low book value from too much debt, for example, means that the companies profits will be limited even if it does lots of business. Sometimes a low book value means that assets are under estimated; experts consider these kinds of companies good.

Balloon loan: Mortgage loan in which the remaining amount is fully due and payable at a specified, predetermined date. Balloon loans may have a better interest rate, but you will have to be prepared to pay the remaining balance of the loan in full (or obtain a new loan) at the specified time. Back to Top

C

Cash: Savings account, money market funds, certificates of deposit.

Cash flow: The difference between the money flowing into your pocket as income and the money flowing out as expenses and debt. Cash flow may be either positive or negative.

Common stocks: Equity issued by a company that gives the buyer ownership in the company. Stocks may or may not pay the buyer a dividend.

CPA (certified public accountant): Has passed a state exam, which gives them the CPA designation. There are many types of CPAs and specialties. Not all CPAs are tax specialists. CPAs may help you with management issues in your company (as controller or chief financial officer) audit your financial statements for loan purposes (auditor), or help you with tax planning. (Known as Chartered Accountant in other countries)

Call options: Buy - The right to buy the underlying item at the strike price until the expiration date. Sell - Selling the right to buy the underlying item from you at the strike price until the expiration date. Known as a writing call.

Corporate bonds : Are readily available to investors as companies use them rather than bank loans to finance expansion and other activities.

Cash-on-cash return on investment (CCR): This is the amount of annual cash flow divided by the amount of cash you have put into the deal (primarily the down payment). It is shown as a percentage.

Capital gain: The difference between the price at which you bought an investment and the price at which you sold it, less improvements made and other money in the investment.

Commodities: Resources which include gold, silver, copper and other precious metals or food products such as pork bellies, wheat, corn, etc.

Cap: The limit, expressed as a percentage, on the amount of an increase charged by a lender under the terms of an adjustable rate mortgage. Caps protect the borrower from large, unexpected interest rate increases.

CAP (capitalization) rate: This is the Net Operating Income divided by the purchase price. It does not take debt into account. It is an indicator of the value of the property. A general rule of thumb is the higher the CAP rate the lower the price of the property relative to its value. The lower the CAP rate the higher the price relative to its value.

Cash on cash return (CCR): In real estate, it's a percentage figure determined by dividing the annual cash flow of a property by the amount of cash put into the property (typically the down payment and closing costs.)

Closing: The process by which ownership of a property passes from the seller to the buyer. Closing includes the delivery of a deed, financial adjustments, the signing of notes, and the disbursement of funds necessary to complete the sale.

Closing agent: A third-party agent of your choosing (an attorney, escrow agent, representative of the title company, or a professional closing agent), who handles all aspects of the actual transaction.

Closing costs: The expenses incurred in the completion of a real estate transaction.

Contingency: A condition in an offer sheet or contract that must be met before the deal can go forward.

Cost segregation: An accounting strategy which allows you to depreciate your property at an accelerated rate.

Counter offer: A response to an offer to purchase a property that introduces new or different terms and conditions.

Credit report: An Assessment, provided by a local retail credit association, of an individual's ability to repay debt.

Commodities: Commodities are raw materials: the wheat in bread, the silver in earrings, the oil in gasoline, and a thousand other products. Commodity prices are based on supply and demand.

Common stock: Ownership shares in a corporation. They are sold initially by the corporation and then traded among investors. Investors who buy them expect to earn dividends as their part of the profits, and hope that the price of the stock will go up so their investment will be worth more. Common stocks offer no performance guarantees, but over time have produced a better return than other investments. Back to Top

D

Debit: The mortgage or loan on a property.

Debit Card: A card used for making payments that looks similar to a credit card, but is more like a check in the sense that funds are withdrawn directly from the bank account it is attached to, or from the remaining balance on the card. Also known as a bank card or check card.

Debt or debt service: The debt or mortgage payment on a property.

Deferred maintenance: Necessary repairs and upkeep that have been left undone by the seller. Maintenance that has been deferred can represent an opportunity in a deal, allowing you to negotiate a lower price.

Down payment: Cash paid by the seller at closing, representing a percentage of the purchase price. Different types of loans may require different percentages of down payment.

Due diligence: A research process that provides accurate and complete information regarding the physical, financial, and legal attributes of a property.

Derivative: A contract whose value is based on the performance of an underlying financial asset, index, or other investment.

Dividend: Distribution of earnings to shareholders, prorated by class of security and paid in the form of money, stock, script, or, rarely, company products or property.

Dividend yield: Annual percentage of return earned by an investor on a common or preferred stock. The yield is determined by dividing the amount of annual dividends per share, called the indicated dividend, by the current market price per share of the stock.

DJIA (Dow Jones Industrial Average): An index which measures the market performance of it's 30 component stocks over time. Back to Top

E

Earned income: Income that you work for.

Escrow: Money or property put into the custody of a 3rd party until certain conditions are met.

Estoppel certificate: A written statement by each tenant outlining the amount of rent being paid and whether any concessions have been promised to the tenant during the rest of the term of the lease.

Eviction: The process of legally removing a tenant from a rental unit or rental property. Evictions are granted for the non-payment of rent or other breach with the terms of the lease.

Equity: The value of a real estate property less the mortgage and other liabilities related to it.

Earnings per share: Are calculated by dividing the number of shares into profit. If earnings increase each year, the company is growing.

Equities: Ownership interest processed by shareholders in a corporation-stock as opposed to bonds. Back to Top

F

Financial statement: There are several types of financial statements. An Income statement shows a detailed account of income and expenses for a particular period of time. A balance sheet includes the assets and liabilities at a particular time. A statement of cash flow details cash coming in and cash going out. Individuals, properties and businesses all have their own financial statements.

Financing terms: This specifies the type of loan (new, seller financing, assumable, etc.) available, the amount to be financed, as well as an estimated interest rate.

Fixed rate mortgage: A mortgage loan whose interest rate is fixed for a portion or the entire term of the loan. The interest rate will usually be higher that of an adjustable rate mortgage.

Fixer-upper: A property that needs repairs and renovation.

Foreclosure: A legal process whereby a mortgage is terminated and possession of the property is taken over by the lender. Foreclosures usually occur for failure to make payments.

FSBO: For Sale by Owner - a property being sold without contracting a real estate agent professional's services.

Futures: Are obligations to buy or sell a specific commodity - such as corn or gold - on a specific day for a preset price. Back to Top

G

Gross income: Stated as monthly and/or annually, this is the total of all income from all units whether they are actually rented or not. Back to Top

H

Hedge fund: Private investment partnership (for US investors) or an offshore investment corporation (for non US tax exempt investors) in which the general partner has made substantial personal investment, and whose offering memorandum allows for the fund to take both long and short positions, use leverage and derivatives, and invest in many markets. Back to Top

I

Intellectual property: An original creative work, such as an invention, a product or a company brand, that is tangible and can be protected by a patent, trademark or copyright.

Internal rate of return (IRR): This is a return on an investment that assumes all the income (passive/cash flow) you receive is immediately reinvested so that you would be getting a return on that money as well.

Interest: The amount, expressed as a percentage of the total, that a lender charges a borrower for a loan.

IPO (Initial Public Offering): Taking a company public, which means making it possible for investors to buy the stock, the management makes an initial public offering. Back to Top

J

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K

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L

Leverage: In real estate, borrowing money from a financial lender to purchase a property is a form of leverage. You put down a small percentage of money, the bank loans you the rest, and you purchase 100% of the property.

Liability: Something that takes money out of your pocket. Liabilities include items such as credit card debt, mortgages, car loans, school loans etc.

Lease: A legally binding, contractual agreement between landlord and tenant for the occupancy of a rental property. A strong lease stipulates all terms and conditions of the landlord - tenant relationship.

Loan servicing: The paperwork involved in handling mortgage loans.

Loan-to-value ratio (LTV): The amount of a mortgage loan compared to the value of the property purchased. A $100,000 house with a loan of $80,000 has an 80% loan-to-value ratio.

Loss to lease: This occurs when you are charging rents below what the market is charging. To calculate subtract the actual rents you are receiving from the market rent. Back to Top

M

Maturity: The date when a loan is due in full.

Mortgage: A written agreement that gives the lender an interest in the property as security for a loan.

Mortgage broker: Professionals who match financial institutions with money to lend to investors who want to borrow.

Municipal bonds: More than 1 million municipal bonds are issued by states, cities, and other local governments to pay for construction and other projects. The not-so-secret charm of municipal bonds is their tax exempt status. Investors do not have to share their earnings with the IRS-or state taxing authorities.

Mutual funds: Professionally managed portfolio of Stocks or Bonds. Back to Top

N

Net operating income: The total collected income less the total operating expenses.

NYSE (New York Stock Exchange): The New York Stock Exchange provides facilities for stock trading and rules under which trading takes place. It has no responsibility for setting the price of a stock. That is the result of supply and demand, and the trading process.

Notice: A period of time, stipulated in writing, before a stated action will take place. Leases usually specify the amount of the notice the landlord must give the tenant before inspecting the property, charging late fees or beginning the eviction process.

NASDAQ (National Association of Securities Dealers: The principal home of top US growth companies as well as International companies trading shares in the US NASDAQ real-time quotes are transmitted through and International computer and telecommunications network to more than 1.3 million users in 83 countries.

Note (Promissory): A promise to pay a sum of money, over time, in increments or in one lump sum, usually together with interest, whi