How many times were we told as students that there are no such thing as stupid questions? And I bet a large number of us rolled our eyes at the statement. But it’s true. And to add on to that sentiment, I believe that the only stupid questions are the unasked ones because one will never be able to find out the answers if the questions stay inside your brain.
Working in a field that has its fair share of jargon, it’s easy to understand why so many people seem unsure about how to make financial decisions. And without the appropriate knowledge, it can be too easy to make poor or uninformed choices regarding their financial well being; people are unaware of the impact of the choices they’re making. And sadly, it’s not surprising, considering that financial education in our country is nearly nonexistent. Students are taught history, math, and languages, but not finance. There’s no course in which it’s mandatory for you to understand how to balance your checkbook, how to apply for a car loan or a credit card, or how to save money, much less how to plan for your retirement. But that doesn’t mean that you’re an uneducated person. I once had a physician ask me what a CD was. He sheepishly said that he’d heard about these things that banks offered, but he didn’t know what they were. This is a man who was a successful specialist and was renowned in his field, but somehow his extensive education hadn’t included an explanation of what a certificate of deposit was. But that’s why we’re going to give a brief rundown of some of the common financial abbreviations so that you won’t be in the same position as my physician.
APR means annual percentage rate.
BY stands for budget year.
CFP is a certified financial planner.
DB means a defined benefit (mostly in terms of retirement planning).
EFT is an electronic funds transfer.
FDIC stands for the Federal Deposit Insurance Corporation.
GDP means gross domestic product (the N in GNP is for national).
IRA is an individual retirement account.
JTWROS stands for joint tenants with rights of survivorship.
LOI means a letter of intent.
NASDAQ is the National Association of Securities Dealers Automated Quotation.
OWCP stands for the Office of Workers Compensation Programs.
PSP is a profit sharing plan.
ROI means a return on investment.
SEC is the Securities Exchange Committee.
TSA means a tax-sheltered annuity.
YTM stands for yield to maturity.
For more information about making the wisest financial decisions for your life, visit tswealth.com.
