GET THE SUBTEXT — Your No B.S. Guide to Money Terms
There’s a lot of terminology in finance which everyone finds annoying. If you’re ready to get over your frustration, here’s your guide to essential financial concepts taught throughout our classes. We share the formal definitions, and then what we really mean when we say these words. Consider it our middle finger to the way traditional finance has been taught.
To begin to understand is to master (said an idiot).
If you can understand these words, you’re one step closer to learning to care about your money. Biggest care-r wins.
No B.S. Guide to Money Terminology
Credit line — The maximum loan limit the lender permits the borrower to access or maintain.
Subtext: Possible noose to hang yourself with. Congrats, the rope comes free.
Budget — An estimate of income and expenses for a set period of time.
Subtext: Finding material balance in your own personal space.
Cash flow — The amount of money being transferred in and out of an account.
Subtext: How you control the activity of your money so that it supports what you care about, and does not monetize the rest.
Salary — A fixed regular payment made by an employer to an employee.
Subtext: What you get for giving up real risk. It’s okay, maybe it’s not your time yet.
Interest rate — The extra money a borrower needs to pay the lender for being able to access the money today, usually expressed as a percentage of the principal amount.
Subtext: How much you pay someone to own you, in percentage terms.
Capital expenditure — The amount spent to buy or improve a long-term asset.
Subtext: How much you decide to invest in your future and in your people vs. moving money from your left hand to your right hand.
Net worth — A measure of wealth, calculated as total assets minus total liabilities.
Subtext: How much you own yourself, by financial measures.
B.M.W. — The “Ultimate Driving Machine.”
Subtext: You’re a douchebag. After you lease aforementioned “BMW,” your penis will still be the same size. Reconsider what you support, maybe the Earth can be a factor.
Range Rover — Don’t even get us started.
Knowledge is best shared.
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