Financial Terms

This dictionary provides all the most relevant financial terms, covering everything from common words in finance and economic news to the essential concepts needed to value and analyze companies.

B

Berkshire Hathaway | The Blueprint for Financial Invincibility

Berkshire Hathaway is not just a stock ticker—it is a financial philosophy made manifest. It proves that you can build staggering wealth without leverage, without speculation, and without compromising on quality.

C

Cash and Cash Equivalents (CCE)

Cash and Cash Equivalents (CCE) represents the value of all a company's assets that are either physical cash or can be converted into cash almost immediately. In essence, money a company has to cover its short-term obligations.

Compound Interest — The Math of Exponential Growth

For the generational wealth builder, compound interest is the primary force that bridges the gap between a "high income" and "infinite wealth." It is the mathematical wind in the sails of your financial fortress.

D

Dividends: Definition, Benefits & Examples

Un dividendo es la parte de los beneficios de una empresa que se distribuye entre sus accionistas. Un dividendo es la parte de los beneficios de una empresa que se distribuye entre sus accionistas

F

Free Cash Flow

Free Cash Flow (FCF) is the actual cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

I

Intrinsic Value: Definition, Calculation & Examples

Intrinsic Value is the estimated "true" or "real" worth of an asset, based on an objective calculation of its underlying fundamentals rather than its current market price.

N

Net Income: Definition, Calculation & Example

Net Income represents the actual profit a company has earned during a specific period. It is the definitive verdict on whether a business is making money or losing it. This figure leads to other key financial metrics, such as EPS and the P/E Ratio.

P

Payout Ratio

The Dividend Payout Ratio is a financial ratio that indicates the percentage of a company's Net Income that is paid out to shareholders in the form of dividends

S

SOCIMI: What is this? Spain's REIT equivalent?

SOCIMI stands for Sociedad Anónima Cotizada de Inversión en el Mercado Inmobiliario. They are the Spanish equivalent of the American REITs.

T

The Difference Between Assets vs. Liabilities

In common parlance, an "asset" is anything you own that has value, and a "liability" is anything you owe. However, this definition is a trap that keeps the working class tethered to their jobs. An Asset is something that puts money into your pocket.