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Glossary: G - K
General Ledger: The general ledger contains all the financial accounts and statements of a business, including its debits, credits, and balances.

General Partner:
A general partner is presumed to be the authorized agent of the partnership and of all other partners for all purposes within the scope and objectives of the business. The term general partner refers to all the members of a general partnership, as well as all general partners of a limited partnership.

Gift: A gift is a voluntary transfer of assets or property from the transferor to the transferee with no compensation. The transferor cannot retain any incidence of ownership (e.g., control, possession, enjoyment, right to income, or power to designate persons who will receive benefits of ownership) after relinquishing control in the transferred gift.

Gift Tax: This tax is levied by the federal government, and some states, on assets transferred from one person to another. The tax rate increases with the value of the gift. The donor pays the tax, not the recipient.

Golden Boot: The golden boot refers to the offering of lucrative financial incentives or an extension of benefits usually to persuade an older employee to exercise the option for "early retirement." This voluntary election by an employee helps avoid any conflict with age discrimination codes.

Golden Handcuffs: Additional benefits given to a valued and productive employee as an inducement to remain with the company are known as golden handcuffs.

Golden Parachute: A golden parachute refers to a benefits package secured by top executives if a layoff occurs due to a corporate buyout or takeover.

Government Bond: A government bond is a debt security issued by the US government. Two common types are savings bonds and marketable securities; both tend to have low default risk. Government savings bonds are not traded on any exchange; therefore, they are immune to market fluctuation. In contrast, "marketable" U.S. government securities, such as U.S. Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation-Protection Securities (TIPS), are commonly traded.

Grace Period: The grace period is the period of time after the due date of a payment during which the overdue payment may be made without penalty or lapse in contractual obligations.

Gross Estate: A person's gross estate at the time of death is the total dollar value of his or her assets before taxes and other debts.

Gross Monthly Income: Gross monthly income is the total monthly income from all sources, before taxes and other expenses.

Group Life Insurance:
This life insurance policy insures a group of people. Group life insurance is often provided by employers as an employee benefit, or by a professional association for its members.

Guardian: A guardian is an individual who has been given legal responsibility for a minor child or a legally incapacitated adult.

Health Savings Account (HSA): Commonly called HSAs, health savings accounts offer individuals covered by high deductible health plans (HDHPs) tax-favored opportunities to save for medical expenses.

Highly Compensated Employee (HCE): For benefit plan purposes,  a highly compensated employee receives compensation in the top 20% of all employees, is a 5% owner of the business, and exceeds certain annual compensation levels. This category is used in performing nondiscrimination tests.

Home Equity: Home equity refers to the difference between a property's current market value and the sum of all claims against it. For example, a homeowner with a house currently valued at $200,000, and carrying a $150,000 mortgage, has $50,000 in equity.

Hope Credit:  This federal tax credit gives families a tuition credit per student per year for the first two years of post-secondary education.

Household Income: Household income is the combined income of all household members from all sources, including wages, commissions, bonuses, Social Security and other retirement benefits, unemployment compensation, disability, interest, and dividends.

Housing Ratio:
Also called the front-end ratio or payment-to-income ratio, this ratio compares the monthly housing payment to total monthly income.

Income:
Income is defined as the amount received from all sources, including wages, commissions, bonuses, Social Security and other retirement benefits, unemployment compensation, disability, interest, and dividends.

Index:
An index is a hypothetical portfolio of securities that represents a particular market or portion of it. Indexes are used to measure the amount of change in a particular security by comparing it to the change of similar companies. Some well-known indexes are the New York Stock Exchange Index (NYSE), the American Stock Exchange Index (AMEX), the Standard & Poor's 500 Index (S&P 500), the Russell 2000 Index, and the Value Line Index.

Individual Retirement Account (IRA):
An IRA is a tax-deferred retirement savings account that allows individuals to contribute a limited amount per year. A traditional IRA may allow individuals, depending on their incomes and participation in employer-sponsored retirement plans, to deduct part or all of their contributions on their tax returns. Withdrawals made after age 59½ are taxed at the current tax rate. In contrast, Roth IRAs allow individuals to withdraw earnings tax free, provided they have owned the account for five years and are at least age 59½. Contributions are made with after-tax dollars.

Inflation:
Inflation is the general rise in the price level of goods and services that occurs when demand increases relative to supply. Inflation is usually measured by the Consumer Price Index (CPI) and the Producer Price Index. As a result of inflation, the purchasing power of the dollar decreases. For example, if inflation occurs at 3% annually, $100 in one year would be worth only $97 in the next.

Initial Public Offering (IPO): 
IPO refers to a company's first public offering of stock. Often, companies go public when their need for cash exceeds the amount private investors, such as venture capitalists, are willing or able to provide. Investment banks buy shares and then offer them to the public at an offering price. As the stock is traded, the market price may be more or less than the offering price.

Insufficient Funds:
When a bank account does not contain enough money to cover a specific check, it is said to have insufficient funds.

Insurability:
Insurability is defined as the ability of an insurance applicant to be accepted by an insurer, based on health, occupation, lifestyle, and finances.

Insurable Interest:
Insurable interest refers to a potential beneficiary who has a vested financial interest in the life of another person and who might suffer loss upon their disability or death.

Insured: An insured is an individual who is covered by an insurance policy.

Intangible Asset:
Intangible assets are nonphysical resources that provide gainful advantages in the marketplace. Copyrights, software, logos, patents, goodwill, and other intangible factors afford name recognition for products and services. They are all examples of intangible assets that may provide significant value to a business operation.

Integrated Plan:
An employee pension plan may be included for benefit calculationswith Federal Insurance Contribution Act (FICA) benefits, also known as Social Security, or with Old-Age, Survivorship, and Disability Insurance (OASDI) contributions.

Intellectual Capital:
Intellectual capital is a representation of the financial value that human innovations, inventions, and intelligence bring to a business enterprise.

Interest: Interest is the cost of borrowed money. It may be the payment you receive from an investment, such as a bond, or the amount you pay for a loan, which is generally a percentage of the total amount borrowed. For example, if you take out a $5,000 loan for a year at 9% interest, the cost of taking the loan would be 9% of the total amount borrowed—$450. Also, interest can refer to a right or share in an asset or property.

Interest Rate: The cost of borrowed money expressed as a percentage for a given period of time, usually one year, is an interest rate. Interest rates are considered by many to be key economic indicators. The Federal Reserve (The Fed) regulates interest rates. The Fed may lower interest rates—making borrowing money less expensive—in an effort to stimulate growth in the economy, or it may raise them—making borrowing money more expensive—in an effort to slow economic growth.

Internal Rate of Return (IRR): The theorem of internal rate of return is, in effect, compounding interest in reverse, or discounting. In contemplating a current investment with a proposed investment, IRR is a most efficient evaluation. The rate of return on a proposed investment should be equal to the present value of all future benefits, including revenues, as well as the gross costs associated with the (current) property investment. IRR is important in planning capital outlays, as well as in evaluating rental real estate investments.

Investment Objective: An investment objective is a financial goal of an investment. Different investment vehicles have different objectives. For example, a fixed-income fund may have outlined in its prospectus an objective of providing current income by investing in fixed-income securities, whereas a capital growth fund looks to provide long-term capital gains and high potential future income. Individual investors also have personal investment objectives, based on their own time horizons and tolerance for risk.

Irrevocable Trust: This trust cannot be altered, stopped, or canceled without the permission of the beneficiary, or trustee. The grantor, who has transferred assets to the trust, gives up all ownership rights to the assets and to the trust. During circumstances where the trustee cannot interpret or carry out his or her specific duties, the court is then asked to make legal determinations. 

Joint Tenancy: Also called joint tenancy with right of survivorship, this form of property ownership involves two or more people who own an undivided interest in a property. Upon the death of one joint owner, ownership automatically passes to the surviving joint owner(s) without a court proceeding. Joint tenancy applies to property with a title or other certificate of ownership, such as real estate, mortgages, securities, and bank and brokerage accounts.

Keogh Plan:
A Keogh plan is a tax-deferred defined benefit or defined contribution plan that is established by a self-employed individual for him/herself and his/her employees.

Key Employee:
A key employee is an employee who possesses valued skills, craft knowledge, or intellectual and organization abilities. He or she is considered crucial to the ongoing operation of the business or company and difficult to replace. Also, the term key employee is used in applying top heavy tests for qualified referral plans under the Internal Revenue Code (IRC) Section 416.

Key Person Insurance:
Companies often have employees who possess craft or scientific knowledge, leadership, and valued skills. Hiring a replacement might alter business planning, profit, stability, and management. To address the financial aspect of replacing a key employee, the corporation becomes owner and beneficiary on an insurance policy that reimburses the company for untimely loss of a key employee.
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This site has been published for residents of the United States. The site has been prepared for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular strategy. ChartMark Investments is a Registered Investment Advisor in the states of Oklahoma, Louisiana and Texas. If you are not a resident of one of these three states we will not be able to share investment advice and related services with you at this time. Should you desire information on ways in which our company may help you with your financial service interests please feel free to contact us. We may be able to become registered in your state or qualify for a de minimis exemption at which time we would be able to further discuss how our services may meet your needs.



This communication is strictly intended for individuals residing in the state(s) of LA, OK and TX. No offers may be made or accepted from any resident outside the specific states referenced.
 


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