The process of gradually paying off a debt through regular payments over time

The mortgage amortization schedule shows how much principal and interest you pay each month.

A financial product that provides regular payments to someone, usually during retirement

She purchased an annuity to ensure she would have income after she stops working.

An increase in the value of an asset over time

The appreciation of their house value allowed them to sell it for twice what they paid.

A plan for dividing investments among different categories like stocks, bonds, and cash

Their asset allocation strategy includes 60% stocks and 40% bonds for balanced growth.

A person who receives money or benefits from a will, insurance policy, or investment

She named her daughter as the beneficiary of her life insurance policy.

The practice of spreading investments across different types of assets to reduce risk

The financial advisor recommended diversification to protect the client's savings.

An investment strategy of buying the same amount regularly regardless of price changes

Through dollar-cost averaging, she invests $500 monthly whether the market is up or down.

The value of ownership in an asset after subtracting any debts owed on it

After paying the mortgage for ten years, they built up significant equity in their home.

The amount of wealth that can be passed to heirs without paying estate taxes

The current estate tax exemption allows families to transfer millions without federal taxes.

A person who is legally required to act in someone else's best financial interest

As a fiduciary, the investment manager must put his clients' needs before his own profits.

A collection of all investments owned by a person or organization

His financial portfolio includes stocks, bonds, real estate, and cash savings.

Using borrowed money to make investments, hoping to earn more than the cost of borrowing

The company used leverage to buy more equipment and expand their business.

How easily an asset can be converted into cash without losing value

Savings accounts have high liquidity because you can withdraw money anytime.

The legal process of validating a will and distributing a deceased person's assets

The family had to go through probate court to settle their father's estate.

Special savings or investment accounts that offer tax benefits to encourage saving

She maximizes contributions to tax-advantaged accounts like her 401k to reduce her tax bill.

Strategies to efficiently pass money and assets to the next generation with minimal taxes

Wealthy families often use wealth transfer planning to preserve their fortunes for their children.