Rich Dad Poor Dad vocab

Mutual Funds

A variety of stocks, bonds or securities grouped together, managed by a professional investment company and purchased by individual investors through shares. The shares posses no direct ownership value in the various companies

Cash Flow

Cash coming in (as income) and cash going out as expense. It is the direction of cash flow that determines if something is income, expense , asset, or liability.

Financial Aptitude

What you do with money once you make it. How to keep people from taking it from you, how to keep it longer, and how to make that money work hard for you.

Income statement, or Profit and Loss Statement

It measures income and expense, money in and money out

Balance Sheet

The lower part of an income -statement diagram. Supposed to balance assets against liabilities.

Income

The money that is received as a result of the normal business activities of an individual or business.

401 K

A U.S retirement plan developed by the ERISA of 1974 when companies realized they could not provide for retiree's health care.

Bond

A debt security in which the authorized issuer owes the holders a debt and is obliged to repay the principal and interest at a later date, termed maturity.

Social Security

A social welfare or social insurance program commonly funded through automatic payroll deductions to subsidize persons in their old age and with disabilities.

Financial Statement

A statement of your income, expenses assets and liabilities. Your "report card" when you leave school and what your banker wants to see before lending you money.

Golden Rule

He who has the gold makes the rules.

Entrepreneur

Someone who creates a system to offer a product or service in order to obtain a profit. Entrepreneurs are willing to accept a level of risk to pursue opportunity and are viewed as fundamentally important in the capitalistic society.

Asset

Something that puts money "in your pocket" with minimum labor.

Liability

Something that take money "out of your pocket"

Stock

The capital raised by a corporation through the distribution of shares.