Financial glossary
Lessons and tools for teens, parents and educators: saving, compound interest, budgets and risk. Practise investing with virtual money only.
- What is money?
Money is a common means of payment used to buy things and compare prices.
Level 1 · 3 minutes to read - Checking account: the home of daily money
A checking account is a bank account for everyday payments, deposits and withdrawals.
Level 1 · 3 minutes to read - Percentages: The Language of Money
A percent is a part out of one hundred.
Level 1 · 4 minutes to read - Profit and loss: reading the numbers
Profit or loss is the difference between an investment’s current value and its cost.
Level 1 · 3 minutes to read - How to read a chart
A chart displays data. Check what is measured, the units and the period before drawing conclusions.
Level 1 · 5 minutes to read - Stop Before a Big Promise
An investment scam tries to get you to transfer money by deception.
Level 1 · 3 minutes to read - Inflation and Purchasing Power
Inflation is a rise in the general price level over time.
Level 2 · 3 minutes to read - Compound Interest: Time Makes a Difference
Compound interest is earning interest on interest that has already been added.
Level 2 · 3 minutes to read - Money Market Fund: Close to Cash, But Different
A money market fund is a mutual fund that invests in short-term assets with relatively low risk.
Level 2 · 3 minutes to read - Deposit, Checking Account or Money Market Fund?
A deposit is an agreement with the bank to place money under specified interest and for a set period.
Level 2 · 3 minutes to read - Loan: the money now, the repayment later
A loan is money you receive with an obligation to repay according to agreed terms.
Level 2 · 4 minutes to read - Fees: Small Numbers Add Up
Commissions and management fees are costs that reduce the investor's outcome.
Level 2 · 3 minutes to read - Stock: a small piece of a company
A stock is a share of ownership in a company.
Level 3 · 3 minutes to read - Why do prices change?
A market price is formed at the meeting point between buyers and sellers.
Level 3 · 3 minutes to read - Risk: understanding what you can lose
Risk is the possibility that the outcome will be different from expected, including loss.
Level 3 · 3 minutes to read - Mean, Median and Sample
The mean is the sum of the values divided by their count; the median is the middle value in a sorted series.
Level 3 · 4 minutes to read - Average return is not a promise
A historical average describes a certain period; it is not a commitment to a future outcome.
Level 3 · 4 minutes to read - Diversification: more than one basket
Diversification is splitting investments among different assets and sectors.
Level 3 · 3 minutes to read - Bonds: When You Lend Money
A bond is a security that represents a commitment by the issuer toward the holder.
Level 3 · 3 minutes to read - What is a fund and what is an index?
A fund pools investors’ money and invests it according to a defined policy.
Level 3 · 3 minutes to read - ETF, index-tracking fund and money market fund
A fund pools investors’ money and invests according to a policy. “Tracking” describes the method; “ETF” also describes the way it is traded.
Level 3 · 4 minutes to read - How do you invest in an index?
An index is a measurement of a group of securities according to rules. It is not a security you buy directly.
Level 3 · 4 minutes to read - How does one fund unit represent a basket of stocks?
A unit in a fund gives a proportional share of a fund that holds assets; it is not one share in each company.
Level 3 · 5 minutes to read - How do company weights change an index?
An index can weight companies by market cap, price or equal weight. A large number of companies does not guarantee balanced diversification.
Level 3 · 5 minutes to read - Buying on the screen to understand the operation
A buy order is a request to execute a trade. Sending an order is not always the same as executing a trade.
Level 3 · 4 minutes to read - FX: What’s the price of a dollar?
FX means foreign currency. An exchange rate describes how many units of one currency equal one unit of another currency.
Level 3 · 4 minutes to read - Spot rate, buy rate and sell rate
The quoted (spot) rate is an informational indicator. It is not a promise of the price at which a bank or currency service will execute a transaction.
Level 3 · 4 minutes to read - How insurance works: premiums, cover and deductibles
Insurance is an agreement to pay a premium for cover against specified events. It helps manage possible losses; the terms determine when and how much is paid.
Level 4 · 5 minutes to read - Insurance types: health, life, home, motor and travel
Different insurance products address different risks. Start with what a product covers, who receives payment and on what terms, rather than relying on its name.
Level 4 · 6 minutes to read - Reading a policy and understanding overlapping cover
Reading a policy means checking covered events, exclusions, price and possible payment. Similar policies are neither automatically redundant nor a promise of double payment.
Level 4 · 6 minutes to read - How is the pension connected to companies?
Pension savings pool money intended for the long term and are invested according to the track and rules.
Level 4 · 4 minutes to read - Where do our taxes go?
A tax is a compulsory payment collected by law and helps finance public activities and services.
Level 4 · 4 minutes to read - VAT: the price before and after
Value added tax is a tax on transactions that are liable for it. In the consumer price it is usually already included.
Level 4 · 4 minutes to read - Gross, net and tax brackets
Gross is the amount before deductions; net is the amount that remains after the relevant deductions.
Level 4 · 4 minutes to read - Tax bands and credit points, step by step
Marginal tax applies to the last slice of income. Effective tax is total tax divided by income. They are different numbers.
Level 4 · 6 minutes to read - National insurance and health insurance contributions
These are compulsory payments governed by rules separate from income tax, related to the social security and health systems.
Level 4 · 4 minutes to read - Property tax (Arnona), fees and payments to the municipality
Arnona is a local tax on property, typically imposed on the holder according to rules.
Level 4 · 4 minutes to read - Excise, Customs and Purchase Tax
These are types of indirect taxes that may be included in the price of certain products.
Level 4 · 4 minutes to read - Donations and the Section 46 tax credit
A donation to an appropriately approved institution under Israeli Section 46 may give an individual a credit of 35% of the eligible donation, subject to conditions. Section 46 is a legal provision, not one universal application form.
Level 4 · 6 minutes to read - Tax on Capital Gains and Dividend
Realized capital gain is usually created on sale; a dividend is a distribution by a company to its shareholders.
Level 4 · 4 minutes to read - Tax relief from capital losses: what do you actually receive?
A tax shield is a name for potential tax savings. In investing, eligible capital losses may offset qualifying gains under tax rules. It is not repayment of the entire investment loss.
Level 4 · 6 minutes to read - Budgeting for a house or an apartment
A full budget includes land or property, additional costs and work, not just the headline price.
Level 5 · 5 minutes to read - Who builds the home? Contractors and supervisors
A contractor performs work. A turnkey contractor coordinates a delivery package defined by the contract and specification.
Level 5 · 5 minutes to read - Mortgage basics: principal, equity and security
A mortgage is a loan secured against property. Principal is the amount borrowed; interest is the cost of borrowing.
Level 5 · 5 minutes to read - Contingency and construction cash flow
A contingency covers overruns; cash flow also checks when payments fall due and funds become available.
Level 5 · 5 minutes to read - Mortgage tracks: fixed, prime and index-linked
A track defines how interest and principal can change. A mix divides borrowing between tracks.
Level 5 · 5 minutes to read - Payments, amortisation and refinancing
An amortisation schedule separates principal and interest. An unlinked annuity loan has constant payments when its rate stays constant.
Level 5 · 5 minutes to read - What is a legal entity?
A legal entity is an organisation recognised by law as a separate legal person. A company is one type, but not the only type.
Level 6 · 5 minutes to read - A Business: Sole Proprietor and a Limited Company (Ltd.)
A company is a separate legal entity; 'Ltd.' indicates limited liability of the shareholders under the law.
Level 6 · 5 minutes to read - Issuing and trading shares: who receives the money?
Issuing new shares can raise money for a company. In trading between investors, the seller usually receives the money.
Level 6 · 4 minutes to read - Private company and public company
Private and public describe a legal status related to the company's shares; Ltd. describes liability, not the same classification.
Level 6 · 5 minutes to read - Exempt Dealer and VAT-Registered Dealer: Exempt from What?
Exempt Dealer and VAT-Registered Dealer are classifications for VAT purposes; being exempt does not mean exempt from all taxes.
Level 6 · 5 minutes to read - Transaction Invoice, Tax Invoice and Receipt
A transaction invoice documents a transaction; a tax invoice is a tax document; a receipt documents the receipt of payment.
Level 6 · 5 minutes to read - What is an allocation number for an invoice?
An allocation number is a number from the Tax Authority in the context of Israeli invoices, in addition to the business's invoice number.
Level 6 · 5 minutes to read - Company, Corporate Tax and Undistributed Profits
Company money is not automatically the private money of the shareholder.
Level 6 · 4 minutes to read - Wallet company: a company is not a tax shortcut
A wallet company is a term used in a tax context, not a separate form of incorporation in the Companies Registrar.
Level 6 · 5 minutes to read - Personal insolvency: what is bankruptcy?
Insolvency means being unable to pay debts when due, or having liabilities greater than the value of assets.
Level 6 · 5 minutes to read - Company insolvency: rehabilitation or liquidation
A company may be insolvent if it cannot pay debts when due, or its liabilities exceed the value of its assets.
Level 6 · 5 minutes to read - Price-to-Earnings (P/E): What is the price relative to earnings?
The price-to-earnings (P/E) ratio is the share price divided by earnings per share. It is a ratio, not a forecast and not a buy recommendation.
Level 7 · 5 minutes to read - Two funds: Did we really diversify?
Different funds can hold the same companies. Check cumulative exposure, not just the number of funds.
Level 7 · 5 minutes to read - Crypto: What Is Bitcoin?
A cryptographic asset is a digital asset that operates using cryptographic rules and a network of computers.
Level 7 · 3 minutes to read - Blockchain, Wallet and Private Key
A blockchain is the ledger shared by the network, and a wallet is a tool to manage access and actions on the network.
Level 7 · 3 minutes to read - Crypto: Spotting Scams and Risk
Crypto safety includes keeping secrets, vetting services and understanding actions that are not easy to reverse.
Level 7 · 3 minutes to read - Leverage: losses grow too
Leverage is increasing exposure using debt or another mechanism.
Level 7 · 4 minutes to read - FOREX: Currency risk and leverage
Currency risk is a change in value because of an exchange rate movement. Leverage increases exposure relative to the money invested.
Level 7 · 4 minutes to read