Advice is an opinion or recommendation that influences a person. On a financial level, it's normally about acquiring, holding or disposing of a financial product.

A category of financial assets. Domestic shares, international shares, property, cash - these are all different asset classes.

The resources owned by a company or individual. Some examples for individuals include a car, a guitar and a computer.

Automatic Teller Machines. Use ATMs to deposit and withdraw cash, check balances and transfer money between accounts.

ASIC is one of three Commonwealth Government bodies that regulate financial services. It is also the single national regulator of all companies in Australia.
Website - www.asic.gov.au

The principal exchange for buying and selling shares, bonds and certain other securities in Australia. The ASX also has a regulatory role to ensure trading is open and fair and nothing dodgy is going on (called 'maintaining market integrity') - it works closely with ASIC to do this. Companies listed on the exchange (you can buy and sell their shares via the exchange) must comply with the ASX's rules and regulations. The ASX is itself a publicly listed company, and is actually listed on itself! Website - www.asx.com.au

In relation to employment, an award sets out the minimum wages and conditions of employment for particular employees. Awards can be created at a State or Federal level.

A service that enables bill payments to be made via the Internet or telephone. Selected bills can also be issued and viewed via the Internet with BPAY View^TM, saving paper and postage costs.

A type of credit card accepted in Australia and New Zealand only.

The placing of an individual's assets and liabilities with a trustee to liquidate and distribute to creditors. Bankruptcy can be declared if an individual's liabilities exceed their assets and/or accounts cannot be paid. 

A term that is used a lot in the share market; it means a market where stock prices are generally falling. The opposite of bull market. 

Shares in a company that is known for excellent management and strong financial structure. Blue chip is the term used for what are generally considered to be quality investments.

A term that is used a lot in the share market; it means a market where stock prices are generally rising. The opposite of bear market.

Funding for investment in capital assets or to operate a business. Also refers to the value of an investment in a business, or in assets such as property or shares.

The difference between the sale price of an asset and its original cost.

A tax on profits from the sale of capital assets, such as shares. A capital loss can be used to offset a capital gain, reducing any tax you would otherwise have to pay.

An increase in the market value of an investment. This is different to income that may be received from an investment, e.g. dividends from shares.

A cash withdrawal from a credit card account. Cash advances do not receive the benefit of any interest-free period, i.e. interest accrues from the day of the cash advance.

An international ATM network, Cirrus allows customers to obtain balance enquiries and/or withdraw cash at all overseas ATMs featuring the Cirrus logo.

See Inflation.

A legal document that binds two or more parties to perform duties as set out in the document.

A credit report contains reports and information from companies that have lent money to you. Credit Reporting Agencies collect data from over 4,000 subscribers in Australia including financial institutions, telecommunication providers and retailers.

When you apply for a loan or any service where you are sent a bill, like a mobile phone, the financier checks with a credit reporting agency to see if you've had repayment problems in the past. They use the information provided by the credit reporting agency to help assess if it will lend you money or supply you with a service.

Failure to repay debt may impact your credit rating. If you've never applied for credit or haven't used credit in the last five years, then it's unlikely that a credit reporting agency will have information about you. A copy of your credit file can be obtained by writing to the credit reporting agency.

If you default on a loan from a financial institution, it means you've failed to make the agreed repayments. This is not good. If you default, it may affect your credit rating.

Regular payments that you authorise to be debited (withdrawn) directly from your bank account. Also called periodic payments.

Terminating a contract. If discharge is an option in the contract then the conditions of the discharge must be included in the contract. See Contract.

Splitting up your investments into different asset classes to reduce risk. A fundamental rule of investment which simply means "don't put all your eggs in one basket".

The amount of a company's earnings that it pays to shareholders. A dividend represents income from your investment and is one way you can make money from shares. The other is Capital Growth.

Electronic Funds Transfer at Point of Sale. It enables you to purchase goods and services (and withdraw cash if the merchant agrees) at participating outlets using a debit card and PIN.

The process where information is encoded so that others (other than the intended recipient/s) can't read it.

A common currency that has replaced the individual currencies of 12 European countries, including France, Italy, Ireland and Germany. The UK, Denmark and Sweden are members of the European Union but are not currently participating in the single currency.

The amount of money you need to pay on some insurance policies when making a claim.

The cost of buying or selling a currency using a different currency, e.g. an exchange rate will tell you the cost of buying US dollars using Australian dollars.

Banks, credit unions, credit card providers, building societies, insurance companies.

A general term for the markets in which financial securities are traded, e.g. stock exchanges, currency markets.

In Australia, the financial year runs from 1 July to 30 June, although some Australian companies follow the US financial year, 1 January to 31 December. The financial year is also known as the fiscal year.

When you own shares or non-share equity interests in a company, or invest in a managed fund, you may get your portion of the profits paid as dividends. Dividends paid to shareholders by Australian companies and some New Zealand companies are taxed under a system known as imputation.

As a company already pays tax on profits it earns (currently at 30%) investors are entitled to offset this amount against the tax on their dividends. You are entitled to what is called a 'franking credit', which may cover or partly cover the tax payable on your dividends.

Dividends can be either 'fully franked', meaning the company has paid tax on the full dividend, or 'partly franked', meaning that the company has only paid tax on part of the dividend. If a dividend is 'unfranked' you won't be entitled to any franking credits since the company has not paid any tax on the dividend, so you will need to pay tax on it.

When you intentionally mislead another person or company to gain an unjust advantage. Fraud can have criminal implications.

The total amount before anything is deducted, e.g. your gross income is your income before any tax, superannuation, etc. is deducted.

Increase in the value of assets.

A person who agrees to repay a loan on behalf of another party if they default.

A person (not being a parent of the child) who is legally responsible for a person under 18.

Higher Education Contribution Scheme. Payments made by students to contribute to part of the cost of their higher education.

Higher Education Loan Programme which replaced HECS on 1 January 2005.

When you do something without thinking it through. As in 'impulse purchase'.

A method of taxing share income in Australia that prevents tax being paid twice on the same income.

The increase in the cost of living (prices for goods and services). Inflation is measured as an annual average by the CPI (Consumer Price Index).

A period of time where interest is not charged on a loan, particularly credit cards. The length of time can change with different loan (credit card) providers.

The price of money. Interest is what you pay when you borrow money and what you are paid when you lend your money to someone else, like a bank.

Putting money into an asset or a financial institution with the aim of making a profit.

An investor's collection of investments. A portfolio is a list of the total number of investments an individual investor holds. A diversified portfolio contains assets from a number of different asset classes.

Debts. What you owe.

Converting assets into cash.

The ability of an investment to be easily converted into cash with little or no loss of money or time. You would say that investment in property is illiquid, because it takes time and money to sell, but funds in a savings account are highly liquid.

Insurance that helps ensure your loan repayments are paid if you die before the loan has been repaid.

See Secured loan.

When you're talking about investing, the term refers to the length of time you hold an investment. Long term is generally 5 years and beyond.

The international equivalent of EFTPOS, the Maestro service allows you to purchase goods and services at participating overseas outlets using a debit card and PIN.

Also known as unit trusts, managed funds pool your money with a number of other investors into a single fund that is then managed by investment professionals on your behalf. Managed funds can invest in a variety of assets including shares, property and fixed interest or a combination of these.

A type of credit card accepted worldwide.

Medicare is the scheme that gives Australian residents access to health care. To help fund the scheme, resident taxpayers are subject to a Medicare levy which is normally calculated at 1.5% of their taxable income. For more information visit the Australian Taxation Office website at www.ato.gov.au.

Negative gearing occurs when you borrow to invest in an income producing asset and the cost of borrowing exceeds the returns (income) from that asset.

The amount remaining after taking away debts, deductions or expenses. For example, your net income is your income after any tax, superannuation, etc. is deducted.

A service provided by financial institutions which enables a customer to continue to write cheques or make other withdrawals from an account even when there is not enough money in the account to cover them. In effect, an overdraft is a form of credit, which attracts interest charges for as long as you are overdrawn.

See Direct debit.

Money lent to an individual by a financial institution for a specific personal purpose except buying a house. One main difference between a personal loan and a home loan is that most personal loans are unsecured.

Used in conjunction with a card to access electronic banking services.

When you're talking about insurance, a premium is the cost of the insurance policy.

This is a Commonwealth Government initiative that offers a 30% discount on premium payments for private health insurance. It can be claimed as:

• a reduction in your health insurance premium
• a cash or cheque rebate from Medicare
• a tax offset on your tax return
• a combination of all these options.

For more information visit the Australian Taxation Office web site at www.ato.gov.au

A PDS is a document (or group of documents) which describes a financial product or service, including the features, benefits, cost and risks associated with that product. The purpose of the PDS is to ensure you are well informed about the product.

A document that sets out the financial history and current status of a security offer made to the public. A company undertaking a share issue must issue a prospectus, and it must be made available to all interested investors before they can invest. A prospectus must be registered with the Australian Securities and Investments Commission (ASIC).

A document that summarises your personal details, education and work history. Also known as a curriculum vitae (CV).

The amount of money received from an investment. Often expressed as a percentage per annum/year.

The inherent uncertainty of returns - the chance that returns will vary from the expected result. Risk averse investors prefer relatively low risk investments where the return is more predictable.

The idea that to increase return you have to increase risk. If you decrease risk, you also decrease potential return.

A connection via the Internet that ensures any information you send is protected from other users. See Encryption.

A general term applied to 'paper assets' traded on financial markets, e.g. shares, bonds etc.

When a borrower offers a specific asset to a lender in case they can't repay the loan. If the lender has 'security over an asset' it means that if the borrower doesn't repay the loan, the lender is entitled to sell the asset and use the proceeds to repay the debt. A mortgage over a house is the common form of security for a home loan.

The ownership of part of a company. Ownership entitles the owner to share in any profits. See Dividend. Also called stocks.

A trained person who researches the merits of investment in a particular company or industry. The analyst's opinion may help an investor to decide what action he/she should take.

When you're talking about investing, the term refers to the length of time you hold an investment. Short term is generally less than one year.

A formal record of the products and/or services recommended to you by a financial organisation. It needs to be based on an understanding of your needs, objectives and financial circumstances. It would normally outline the advice, the basis on which it is given and information about fees, commissions and any other factors that may have influenced any recommendation.

Also known as super, it is a compulsory savings program to make sure that when you reach retirement age, you have some money to live on. Your employer must make contributions into your super fund. You can also make contributions to your super.

Different rates of tax are payable depending on your level of income. Tax brackets set out the rate of income tax applicable to each level of income.

Any money you spend that allows you to earn an income. It is 'deducted' from your taxable income, reducing the amount of tax you have to pay.

A guide issued by the Australian Tax Office containing tax return forms and information on how to complete those forms.

A document required by the Australian Taxation Office at the end of the financial year containing a person's income tax details.

Also known as a fixed deposit, they generally offer a higher interest rate than savings accounts that is fixed for the term of the deposit. If you make withdrawals prior to the end of the term, which can be anything from 30 days to five years, you may be charged a prepayment fee and the amount of interest paid to you will be reduced.

A unique nine-digit number issued by the Australian Taxation Office to individuals and organisations to identify them for taxation purposes.

Fees on withdrawals from your bank account. The levels of transaction fees vary between different accounts and financial institutions.

Insurance to protect you while travelling.

These are handy when you travel overseas and are a safe alternative to carrying cash. You simply buy some before you leave home, and cash them in as you need to. Each cheque has a serial number on it, so if they are lost or stolen, you simply contact the provider and quote the number(s) so the cheques can be cancelled and reissued. Cheques can be purchased in Australian dollars, US dollars, Pounds sterling and most other currencies. Fees for buying and cashing the cheques may apply. It's also a good idea to check with your travel agent or in your travel guide to find out what brand of cheques and currencies are accepted in the country you're heading to.

A person who controls your finances once it has been declared that you are unable to because of bankruptcy or mental illness.

A dividend paid out of profits that haven't been taxed yet, so the owner of the share receives no tax credit.

See Managed funds.

The opposite of a secured loan.

A type of credit card accepted worldwide.