Glossary of terms

Glossary of terms

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Secured loan

A secured loan is secured against some or all of a borrower's assets decreasing the risk associated with the loan. If the borrower defaults on the loan, the lender may get some/all of these assets in order to cover the loan payments.

Glossary: secured loan
A secured loan is secured against some or all of a borrower's assets decreasing the risk associated with the loan. If the borrower defaults on the loan, the lender may get some/all of these assets in order to cover the loan payments.
Glossary: risk
An investment is normally considered to be risky if there is a reasonable chance that its value will vary significantly in the future. For example, an investment in shares is more risky than an investment in a bank term deposit. The value of shares may fall below the price paid for them while the value of bank deposits generally do not. High risk investments should only be taken on with long term intentions. You would expect a high long-term return to compensate for high risk.
Securities

Piece of paper that proves ownership of stocks, bonds and other investments.

Glossary: stocks
Any security traded on a public exchange including fixed interest or equity securities.
Shares

Shares and equities refer to the same thing - a share in the ownership of a company and entitlement to any distributions (eg dividends).

Glossary: Shares
Stocks

Any security traded on a public exchange including fixed interest or equity securities.

Glossary: interest
Money paid in return for the use of money. If the bank is using your money (in a savings account) they pay you interest. If you are using the bank's money (via a loan), you pay the bank money.
Glossary: equity
The amount you would get if you sold an asset and paid back any money you owed on it. For example, if you have a house worth $350,000, and a $300,000 mortgage, your equity in your house is $50,000.
Glossary: securities
Piece of paper that proves ownership of stocks, bonds and other investments.
Superannuation scheme

Funds specifically designed for people saving for their retirement. They are in the form of retail funds available to all savers, or employer funds available only to employees of the sponsoring employer.