Advertising: Sales messages you see in newspapers, magazines, and letters; on billboards, television, or the Internet; and you hear on the radio.Marketerspay for the space that carries their messages to you. The word "ads" is short for advertisements.
Automated teller machine (ATM): A machine that gives you the money you have in your credit union account. You insert your ATM card, use the keypad to enter your secret password and how much of your savings you want in cash, and the ATM gives you the money. ATMs also let you move money between your accounts and check their balances.
Balance: 1. The amount of money in an account. 2. Comparing checks you wrote with the ones your credit union has received plus any deposits and minus any fees. You balance your checking account to make sure you don’t write a check for more money than you have.
Board of directors: 1. People elected by credit union members to give instructions to the people who run a credit union. 2. People elected by a company’s stockholders to give instructions to the people who run a company. A company’s board of directors decides when to pay dividends to members or stockholders.
Bond: A piece of paper that is a legal document, such as a certificate. It contains a promise to repay money that you or someone has borrowed, along with interest. Governments, corporations, small businesses, and other kinds of institutions raise money by selling bonds to investors.
Checking account: An agreement with your credit union to write checks to pay for things. After you use a check as payment, the recipient sends the check to the credit union. The credit union subtracts the amount of the check from your account balance. Some credit unions call checks "share drafts".
Circulation: The action of paper money or coins moving from one person or business to another.
Common bond: Something all members of a particular credit union share, such as an employer, a school, the place they live, or the place they worship.
Cooperative: A business that is owned by the people who use it. A credit union is a cooperative -- all of the people who keep their money there are part-owners, known as members. (Often shortened to "co-op" or "coop.")
Corporate bond: A bond that corporations sell to investors to raise money. Corporations can raise a lot of money by selling bonds in small amounts (for example, $25) to many investors. Investors keep the bond as the corporation’s promise to repay the money. Investors also make more money because the corporations pay them interest.
Corporation: A way or organizing your business so that its finances are separate from your personal finances. A corporation has legal rights and responsibilities that protect your business.
Credit union: A group of people united by a common bond who pool their money together in order to make loans, offer credit cards and other services, and pay dividends to themselves and other members. Credit unions are democratic. That means that each member gets one vote to elect a board of directors, the people who will make decisions about running the credit union. Credit unions are not-for-profit businesses. That means that after paying interest on savings, paying all bills, and setting some money aside for emergencies and other uses, the credit union gives any money left over back to its members. It might do this directly in the form of refunds, or indirectly in the form of lower fees, lower loan interest rates or higher savings interest rates.
Currency: Paper money.
Dividend: The money a credit union gives its members for keeping their money in the credit union. Dividends come from the extra money a credit union earns. Credit unions return all extra money to members because the members own the credit union. A bank gives its extra money, called "profit" to the stockholders that own it. But the stockholders don’t have to keep their money in the bank.
Federal Reserve Bank: A financial institution that holds money and lends money to other banks and credit unions. There are Federal Reserve Banks in 12 regions of the U.S. They make up the Federal Reserve System.
Googolplex: The largest number with a name. If we knew how many atoms there are in the universe, that number would still be less than a googolplex. Notice that googolplex is not simply the largest number, because there is always googolplex + 1!
Loan: An agreement in which a lender lets a borrower use money with the promise to return it in a certain amount of time. The borrower usually pays back more than he borrowed to make the deal worth it to the lender. This extra repayment is known as "interest".
Loan shark: A person who lends people money and charges an extremely high interest rate on the loan. Loan sharks are usurers who operate secretly, without government regulation, so that people who borrow from them have little or no consumer protection.
Marketer: A person whose job is to help sell products and services. A credit union marketer, for example, must make sure members know what types of savings and checking accounts checking accounts, loans, and other services are available and why they’re a good deal.
Marketing: The act of deciding what product or service people want, how to get it to them, what to charge for it, and how to persuade them to buy it.
Mass media: Ways to communicate with a large number of people at the same time. Some examples are television, radio, the Internet, and newspapers.
Member: A person who keeps his or her money at a credit union. Each credit union member also is an owner.
Mortgage: A loan to buy a building or piece of land.
Patent: Government protection that forbids other people from making and selling someone’s invention. Patents last for 20 years.
Periodic investment: Money you deposit into your credit union savings account on a regular basis, such as once a week, or once a month. The "period" is the number of times in one year you make such regular investments. For example, a period of 12 means you invest once a month.
Price: How much you charge for your product. Many factors come into this decision, such as what it cost you to make it, advertise it, and distribute it; how much people want it. Your cost to make the product includes things like your time, money, and how hard it was to make it.
Principal: This is the total amount of money you have put into your account. Notice that it isn't necessarily the total amount of money you have in your account. This is because the credit union may add money called interest to your principal.
Profit: How much money you have left over after you sell your product. Calculate it by subtracting the total cost of making, advertising, and distributing your product from the amount you charge for it.
Profit margin: A calculation for comparing the profit of different products you sell. Calculate it by dividing the profit by the amount you charge (price) for your product. For example, if your profit on cotton candy that you sell for $1.50 each is $1.20, your profit margin is 80% ($1.20 ¸ $1.50 = 0.8, or 80%). If your profit on Sno-Kones that you sell for $1.00 each is $0.85, your profit margin is 85% ($1.00 ¸ $0.85 = $.85, or 85%).
Receipt: A printed record of the amount of a sale.
Risk: What we call it when you take a chance in the hope that there will be a result that benefits you.
Scam: A trick to get people to give up something of value, such as money or property. Scams succeed because of victims' innocence or greed.
Stock: Ownership of a corporation. Stock is sold in "shares"by buying stock you "share" ownership of the company with everyone else who owns stock in it.
Stockholder: A person who owns stock in a company. When you buy stock, you buy part ownership in a company. That means you can claim part of the company’s earnings. Even as a part-owner, you do not have the right to walk into the company and tell people what to do. But you do have the right to vote for a board of directors that can tell people in the company what to do.
Supply and demand: A term that describes how the amount of something and the number of people who want it determine its price. If something becomes less common or more popular, its price will tend to rise. The opposite also is true, the more common something is, or the less that people want it, the lower its price.
Usurer: Someone who lends people money and charges them an extremely high interest rate.
Wage: Payment for hours worked.
Withdraw: To take money out of your account.