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Explaining Financial Lingo

 

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Financial lingo can sometimes sound like a foreign language. What are indexed annuities? What is an amortization schedule? How ’bout a no-load fund? Well, if you sometimes hear financial terms and you don’t quite know what they all mean, don’t worry, you’re not alone. Let’s look some common financial terms.

What are large cap stocks and small cap stocks? What does all that “cap” stuff mean? Cap is short for capitalization which simply is the total value of the company’s shares. Large cap stocks have a market value of $5 billion or more, and small caps have market values of between $50 and $500 million.

What’s a mutual fund, and how does that differ from simply buying a stock? A mutual fund typically holds ownership in maybe hundreds of different companies. If you buy a stock, you buy ownership in just one company.

What is a growth stock mutual fund? It’s a mutual fund where the primary objective is appreciation of the stocks it holds.  It may not payout much of a dividend.

What’s definition of an IRA and a Roth IRA, and what is the difference? They are Individual Retirement Accounts that are tax advantaged and both grow tax free.  When you invest in an IRA you get a tax deduction on what you put in, and you pay taxes on what you take out. With the Roth IRA, you don’t get a tax deduction on what you put in, but what you take out is tax free.

What’s an amortization schedule? An amortization schedule is simply a loan repayment schedule for a real estate mortgage.

What is a will, and what’s a trust? What’s the difference between the two? Both wills and trusts name one or more people to manage an estate and direct how the assets are to be distributed. The biggest difference is that a trust does not have to go thru probate.

Learn and understand these terms and you will have passed your first test in Financial lingo 101!

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Explaining Financial lingo

Financial lingo can sometimes sound like a foreign language. What are indexed annuities? What is an amortization schedule? How ’bout a no-load fund? Well, if you sometimes hear financial terms and you don’t quite know what they all mean, don’t worry, you’re not alone. Let’s look some common financial terms.

What are large cap stocks and small cap stocks? What does all that “cap” stuff mean? Cap is short for capitalization which simply is the total value of the company’s shares. Large cap stocks have a market value of $5 billion or more, and small caps have market values of between $50 and $500 million.

What’s a mutual fund, and how does that differ from simply buying a stock? A mutual fund typically holds ownership in maybe hundreds of different companies. If you buy a stock, you buy ownership in just one company.

What is a growth stock mutual fund? It’s a mutual fund where the primary objective is appreciation of the stocks it holds.  It may not payout much of a dividend.

What’s definition of an IRA and a Roth IRA, and what is the difference? They are Individual Retirement Accounts that are tax advantaged and both grow tax free.  When you invest in an IRA you get a tax deduction on what you put in, and you pay taxes on what you take out. With the Roth IRA, you don’t get a tax deduction on what you put in, but what you take out is tax free.

What’s an amortization schedule? An amortization schedule is simply a loan repayment schedule for a real estate mortgage.

What is a will, and what’s a trust? What’s the difference between the two? Both wills and trusts name one or more people to manage an estate and direct how the assets are to be distributed. The biggest difference is that a trust does not have to go thru probate.

Learn and understand these terms and you will have passed your first test in Financial lingo 101!

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Bev Cancer Update 11.12.13

Dear Friends,

This past week has been a mixture of challenges, sweetness, and continuing the journey of trusting the only One worthy of trust.

Although my wife, Bev, has been feeling great for the past six weeks, her oncologist discovered that her blood “markers” were elevated indicating that her bone cancer was growing. So, they conducted a bone scan – she was so radioactive that Bev couldn’t hold the grandkids for two days!

Her oncologist called her at night with the results: the tumors along her spine are growing. He told her to stop the medication that wasn’t working and try a new one that he prescribed. Although we admire her oncologist, we asked to see a breast cancer specialist at MD Anderson for a second opinion. He gracious agreed, and helped to schedule it.

What are we learning? Several things.

First, we’ve been reminded that for those who know Jesus Christ personally, we’re pilgrims just spending a short time here on earth before going to our permanent home in heaven. Pilgrims see their earthly possessions for what they are: useful for kingdom purposes, but far too flimsy to bear the weight of trust. Our complete hope is in Christ alone. Jesus is enough.

Second, it’s a huge blessing not to go through a crisis alone. To have a loving spouse, family or friends is a wonderful source of encouragement and support. To hear from so many who are praying for Bev’s healing is an overwhelming encouragement.

Last, there is no substitute for spending time reading God’s word and for praying. The Lord promised us, “I will never leave you nor forsake you” (Hebrews 13:5). Only when we gain God’s perspective as revealed to us in the Bible, and walk closely with our heavenly Father, can we experience the peace and even joy He has for us, regardless of the circumstances.

Love in Christ,

Howard Dayton