Career Transition

Glossary

Asset: What you own.

Asset Allocation: Diversifying your assets to minimize risk.

Bankruptcy: The process of being declared unable to pay your debts by a court. Your assets are then distributed among your creditors.

Career Transition: The process of moving from one job, although not necessarily one career, to another.

Cash Flow: Your income minus your expenses.

Emergency Reserve Fund: An amount of money set aside to use for unexpected needs.

Fair Market Value: The cash equivalent of an asset's value; what a willing buyer would pay a willing seller for the asset.

Illiquid Assets: Things you own which cannot be quickly turned into cash with minimal risk of loss of principal.

Income: Primarily includes your earnings (salary and self-employment income), severance, and unemployment. Other common income categories are interest, dividends, capital gains, investment and rental income, pension, and Social Security benefits.

Liability: What you owe.

Liquid Assets: Things you own which can be turned into cash quickly without risk of loss.

Net Cash Flow: Your income less your outflow (expenses plus the amount that goes into your savings and investments).

Net Worth: What you own (assets) minus what you owe (liabilities).

Notice: The act of being informed that you will be leaving your job begins the notice period.

Outflow: All your expenses and, typically, what you pay yourself (the amount that goes into your savings and investments).

Secured Loan: A loan that is guaranteed (secured) by an asset (collateral).

Unsecured Loan: A loan on your creditworthiness.

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