It may be true that ‘money talks’, but sometimes that conversation can be quite confusing? What is the difference between Disability and Dread Disease cover? How does Inflation Risk affect my investment? What should a sound Investment Strategy include?
At NFB, we believe that understanding and managing our personal finances is an essential foundation to living a successful life. Our ‘Jargon Buster’ is one way we are helping you grow your financial literacy, so you are equipped to make sound financial decisions and build your wealth in partnership with us … after all, Knowledge into wealth is our ethos, and we live this by helping South Africans create a prosperous life.
Cash equivalents are one of the three main asset classes, along with stocks and bonds. These securities are characterised by a low-risk, low-return profile. Cash equivalents include U.S. Government Treasury Bills, bank certificates of deposit, bankers' acceptances, corporate commercial paper and other money market instruments.
A fund that is operated by a trust company or a bank that handles a pooled group of trust accounts. Collective investment funds combine the assets of various individuals and organisations to create a larger portfolio that is well diversified
Disability insurance offers income protection to individuals who become disabled for a period of time, which results in their inability to work during that time period.
A stock or any other security that represents the holder’s ownership interest.
The broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographical borders over a specific period.
The smoothness or equality with which income is dealt out among members of a society. If everyone earns exactly the same amount of money, then the income distribution is perfectly equal.
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.
An investment strategy is what guides an investor's decisions based on goals, risk tolerance and future needs for capital.
A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.
An institution that packages multiple Collective Investment Schemes (Unit Trusts) together to give an investor a single entry into a selection of funds.
A company that is set up with the purpose of managing a group of properties, a mutual fund, an investment fund, etc.
The risk that investment returns could suffer as a result of a country's political changes or instability in the country. Instability could come from changes in the country's government, policy makers or military.
The measure of the total cost of a fund to the investor. Total costs may include various fees (purchase, redemption, auditing) and other expenses. The TER is calculated by dividing the total annual cost by the fund's total assets averaged over that year, and is denoted as a percentage.
The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.