Amanda Stanhaus

Tag: loan

Asset-Backed Security

Banks take loans for things like houses and cars, break them up, and squish them into packages called an asset-backed security. These make money from interest payments on the outstanding loans.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Corporate Bond

loan to a company.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

 

Creditor

These people give credit (i.e. loans). They love to be paid back, and will make themselves known, if they don’t get my lovin’ (i.e. my money)!

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Debt

Owe something to someone.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Debt Payment

Get rid of debt by paying these. On time, preferably.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Government Bond

The Government needs me to spot it some $$. A formal certificate, instead of crumpled up napkin with a scribble, “I owe $$ to…”

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Home Equity Loan

Use home equity to take out another loan.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

One Up, One Down.

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Bonds are a safe bet when the market is in meltdown mode.

(click on the bold-faced vocab word:))

But, I’ll get bitten by a bond when the economy is bullish and interest rates rise accordingly. A bond’s worth is best explained in terms of present value (warning: math ahead).

Even though the $$ loaned will not be mine for awhile, I want to know how much it’s worth NOW.

I need to divide the bond’s payoff by (1+ the interest rate).

Sorry, but it’s easier to rationalize with fractions. 2/4 is larger than 2/5.

Accordingly, when interest rates rise the current value of bonds lowers. AKA 1000/1.05 is larger than 1000/1.1.

That one looked painful, so I plug it into a calc.

My savings account cannot wait for the interest rates to skyrocket. But bond-buyers (*especially long-term bond-buyers*) beware!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Cashmere Card

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Big OOPS!

I didn’t have time to stop by Bloomies’s cashmere sale. I wanted a turquoise cap-sleeve crewneck. My friend was already going, so I lent her my debit card to buy it for me. “What a good friend,” I thought.

(click on the bold-faced vocab word:))

Oh yes, card and PIN. She had full access. And I, sans card, had none.

It took her 4 days to give me back my card. We’re now former friends.

I changed my PIN even before another cent left my checking account.

If there is a next time, it will be a cash transaction.

Being too busy is just maybe a sign I shouldn’t be shopping. No matter how good the discount and what’s on sale. Ugh, life and its lessons.

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Liability

The amount of $$ owed to my friend who spotted my drink Monday night. Must pay back.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)