Yield The amount a bond pays out in interest every year. Click Here for our lesson on Bonds

Working Class A socioeconomic group characterized by filling most working roles in a society but having very little total wealth or power.

Whole Life Insurance Whole life insurance is a type of permanent life insurance. It lasts for your entire life as long as you pay the premiums, with level premiums and a guaranteed death benefit. It also builds cash value, a savings amount that grows over time and that you may be able to use while Read More…

Wealth Management The act of a business to help a person or family to manage their wealth in such a way that it is properly invested to grow over time.

Wealth The total net worth of a person, including intangible assets.

Warren Buffet One of the world’s richest men and most famous investor, and proponent of the Buy and Hold investing strategy.

Warranty A warranty is a guarantee of work or product reliability from a seller or manufacturer to a buyer, offered to increase confidence in the product. An explicit warranty is a promise the seller stated, in writing or out loud, such as free repair for a year. An implied warranty is a promise the law Read More…

Wants The endless goods or services that a person wants, but not needs, to have. Managing “wants” against income and savings is a central conflict of personal finance.

Wall Street A street in downtown New York City that is home to the New York Stock Exchange. Click Here for our lesson on Wall Street

Wage Garnishment The act of a creditor gaining the right to a portion of a person’s paycheck to pay back a previous debt before it is ever paid to the employee itself. This is frequently a consequence of structured bankruptcy procedures or lawsuits.

W-2 A document provided by employers to employees of companies in the United States detailing the total income paid during the previous tax year, including the amount that was withheld by the company and paid to the government as taxes. This is usually the starting point to filing a tax return.

VRIO Framework A strategic thinking exercise that examines if a company or product is Valuable, Rare, Imitatable, and Organized. If the company or product answers “no” to any of these questions, it is not likely going to be able to maintain a strong competitive advantage over competition.

Voting Rights The right of common stock holders of publicly traded companies to vote on key issues facing the company. The most common type of vote is whether to approve a merger or acquisition of another company, or to elect the Board of Directors.

Volume The total number of shares of a security that have traded during the current (or last, if the markets are closed) trading day.

Volatility ETF A type of ETF that gains value as some underlying index’s price becomes more volatile. Investors buy volatility ETFs during periods of great uncertainty when stock prices experience a lot of up and down movement. Related Lessons

Volatility A measurement of how much an investment or portfolio’s price moves up and down over a given period of time. Click Here for the Investing101 lesson on Volatility

Vision Insurance A type of insurance that covers the cost of eye exams, glasses, contact lenses, and corrective vision surgery.

Vertical Management A type of management structure characterized by several layers of management between front-line employees and top decision makers. Vertical management is characterized by clear divisions of business units, with low levels of autonomy for front-line workers and low-level managers.

Variable Interest A type of interest rate applied to loan that changes over time in line with some external index. Variable interest rate loans are typically offered at an interest rate below a fixed interest rate, but the interest rate may increase over time. Click Here for our lesson on Mortgages

Variable Expenses A variable expense is a cost that changes from one month to the next, so it is harder to predict when you plan your spending. Groceries often change with what you buy and how many people you are feeding. Gas changes with how much you drive. Gift shopping can be high in one Read More…

Value Investing An investing strategy based on finding companies that appear to be priced lower than their competitors, based primarily on metrics like PE ratios or another fundamental metric.

Use Tax A type of tax that is applied by using a particular public good or service. A toll on a highway is a type of use tax. Related Lessons

Upper Class A socioeconomic group characterized by controlling the majority of wealth and power in a country or economic system. It may be legally enforced (like a nobility class) or arise economically.

Unsystemic Risk A type of risk that does not risk being catastrophic to a system as a whole, but instead may be a risk to a specific process or business unit. Unsystemic risks are typically easier and cheaper to address.

Unsought Goods A marketing term that refers to items that a customer considers buying that they did not even realize they wanted. This can refer to things like candy bars at the check-out line of a store, or add-on purchases.

Unskilled Labor A type of worker who does not have specialized skills. Unskilled labor is characterized as easy to replace with minimal training if a worker leaves their position.

Unsecured Loan A type of loan that is issued without any underlying collateral. Unsecured loans typically have higher interest rates than secured loans. One example would be a credit card. Related Lessons

Unrealized Losses The value decrease from an investment from when it was purchased until today, but the stock is not yet sold. Unrealized losses are not recorded as losses by a business or taxed.

University A post-secondary educational institution that offers not just specialized degrees in a variety of fields, but also more advanced degrees (Master and Ph. D level) and extensive research facilities.

Unit Of Account One of the major concepts of money that says that a certain amount of money should be consistent over time. For example, $1 is always $1 – you would not go into the store tomorrow and they would tell you that your dollar from yesterday is worth only $0.50 today. While the Read More…

Unit Investment Trust A type of closed-ended fund that has a specific set of securities, but with a specific lifespan. At the end of the life of the Unit Investment Trust, the investors can redeem their shares for the holdings of the trust, or the holdings are sold off and the investors receive cash payments Read More…

Unemployment Rate The rate of number of people who are currently unemployed divided by the total number of people in the labor force (people who either have jobs or are looking for jobs). Related Lessons

Unemployment Insurance A type of government program that protects against short periods of unemployment. Unemployment insurance is a payroll tax charged to employers and can be collected by people if they lose their job through a layoff or firing. If an employee quits, they are not eligible for unemployment insurance benefits. Related Lessons

Underlying Security The investment instrument that a derivative product’s value is based on. For example, the underlying security of an options contract would be the stock this option was written for. Click Here for the Investing101 Chapter on an Introduction to Options (30 min)

Underemployment An economic concept where a skilled person can only find employment in jobs that do not utilize their skills, and so their actual income is considerably lower than what they theoretically could earn with the skills they possess. An example of this would be a doctor working as a taxi driver – while she Read More…

Uncollectable Accounts Accounts that exist on a company’s balance sheet as an account receivable that the company acknowledges will never be collected, usually due to the person who owes the money having been declared bankrupt. Uncollectable accounts are typically written off the balance sheet at the end of the period.

Ultimate Consumers Ultimate Consumers are the final consumers in the chain of a resource life. An example would be potash mined as fertilizer – it is first mined by a mining company, then sold to fertilizer companies, then sold to farmers, who use it on their crops, who sell their crops to grocery store chains, Read More…

Trust Fund A type of entity that exists and can hold assets but acts as a fiduciary agent for some other beneficiary. An example of a trust is a Real Estate Investment Trust, which uses the funds provided by its investors only to invest in real estate to provide a return for its investors. Trusts Read More…

Trial Balance A first attempt of an accountant to prepare financial statements for a company. The trial balance is used to ensure all credit and debits are equal before any adjusting entries are made to prepare the finalized financial statements.

Trend Lines Lines on a chart that “smooth out” variations by using a moving average of a subset of the data points. Trend lines allow an analyst to see longer-term trends without being distracted by short-term changes. Related Lessons

Treasury Stock Stock that has been re-purchased by the company that issued it. Companies hold treasury stock until the stock’s price increases, then re-sells it on the open market.

Treasury Bond A bond issued by the federal government to fund government activities. The largest holder of treasuries is the Social Security Administration, which uses the interest payments on treasury bonds to fund the system. Click Here for our lesson on Bonds

Transunion One of the three major credit rating agencies that issues consumer credit reports.

Trailing Stop Order A type of order for a stock or other security that specifies that the “stop price” of the order moves to match the peak of the stock as the price changes. Click Here for our tutorial video on Order Types

Trade-In The act of taking one asset and using its value towards the down payment of another. This is most commonly used when purchasing a car – a person’s existing car can be “traded in” towards the down payment on the new car.

Trade Validation An action as part of an electronic trading system for investments that validates the trade the user did indeed enter the details of the trade about to be processed and will be properly sent to the market for execution.

Trade Surplus A concept from international trade where one country exports more goods or services from another country than it imports in return.

Trade School A type of post-secondary education that seeks to train students in a particular skill. Trade Schools often focus on specific technical skills, like construction, plumbing, or automotive repair.

Trade Reporting A reporting requirement that orders that are executed on a stock exchange by major investment banks (“market makers”) must be reported within 90 seconds of order execution to prevent asymmetric information.

Trade Fulfillment The act of an order that was placed from an investor being executed on the open market, and the shares of stock (or cash in exchange for stock) is transferred back to that investor’s account.

Trade Deficit A concept from international trade where one country may import more goods or services from another country than it exports in return.

Trade Capture The process where a brokerage registers that an investor has placed an order on their front-end system. After trade capture, the order is passed to back-end systems and onto the stock exchange itself for order execution.

Trade Barrier An artificial restriction on trade between two or more countries. This can be an absolute barrier (some good or service may not ever be traded with some country), or simply a high tax placed on the import.

Total Surplus An economic concept combining the Producer’s Surplus and the Consumer’s Surplus to find the total economic benefit of a particular allocation coming from a specific price and quantity.

Tort A “penalty” in the legal sense. For insurance purposes, a “tort” state is one where every accident must establish some level of fault between the people involved, with insurance companies only paying out relative to how “at fault” their insured customer was in the accident.

Tit-For-Tat A concept originating in game theory where a player always repeats back whatever was done to them in the previous turn. This was made most famous in an experiment of the “Prisoner’s Dilemma” game, where the Tit-for-Tat strategy had the highest total reward of thousands of different strategies tested in simulations pitting them with Read More…

Tips Extra payment made to workers in the service industry in appreciation of their individual efforts. Tipping is customary in the United States (and wages of many service workers is low because tipping is expected) but is not in many other countries (where worker wages are higher to compensate).

Time Value of Money The financial concept that time is worth some amount of money. While this also applies to personal finance (such as paying a cleaner to clean your home to save yourself a few hours), it is stronger in higher-level finance and is based on liquidity. If there is a restriction that prevents Read More…

Time Decay The amount of an option’s value that is lost the closer the current date moves to the option’s expiration date. The Time Decay refers to the lost value because someone who would be buying this option has less time for it to generate a potential profit. Click Here for the Investing101 Chapter on Read More…

Ticker Symbol A short code used on a stock exchange to refer to a company’s stock. In the United States, ticker symbols are between 1 and 5 letters long. They are called “Ticker Symbols” because the short form made it faster to transfer information about many stocks quickly using a ticker tape connected to a Read More…

Theft The act of taking something that belongs to someone else. This can be stealing a good or taking and using someone else’s intellectual property without permission.

Terminal Value A calculation used to give some value to a business or asset beyond the scope of the current analysis. For example, if I have a business that I know is growing at 10% per year, I might try to estimate the value of this business over the next 10 years. The Terminal Value Read More…

Term Life Insurance Term life insurance covers you for a set number of years, such as 10 or 20, and pays a death benefit only if you die during that term. When the term ends, the coverage expires. It is usually the least expensive type of life insurance. Whole life lasts for life and costs Read More…

Term The length of a loan or contract. This may be expressed in years, months, weeks, or days. Related Lessons

Ten-Bagger A term used to refer to a stock that increases its price by over 10x.

Technology An economic term to refer to the machinery and other capital used by labor to produce some output. Increases in technology increases the output produced by a given hour of labor – improving total efficiency.

Technical Analysis A type of investment research that focuses on analyzing the movements in a stock’s price to find patterns, typically over a very short period of time (minutes to days). Technical analysts attempt to “buy low” and “sell high” on very small up and down movements of a stock’s price.

Taxable Income Income that is earned and can be taxed. Taxable income is found by taking a person’s net income for the year and subtracting any tax deductions the person qualifies for. Click Here for our lesson on Income Tax Filing and the Form 1040