Wrapping your head around a new concept can be difficult enough. Throw into the equation the fact that this new concept you're keen to learn about practically has its own language and there are bound to be some out there who are taken a little aback.

Fear not though, as in an effort to easy you into the wonderful world of investing, we're going to provide you with a cheat sheet - a glossary to be more specific - that'll have you flinging financial jargon about faster than you can say 'Return on Investment.'

Now, we should note right from the beginning that this isn't the world's most comprehensive glossary. To cover all investment terminology, we'd need to establish a dedicated website! This is, however, a great starting block to allow you to wrap your head around some of the more tricky phrases and terms that are tossed about in investing circles.

If you like what you see and develop a taste for all things financial, feel free to seek out even more terms as there are literally thousands out there.

For now though, let's just stop with what we consider to be the 'Essential 10.'

Asset: Items owned by a person that can be converted to cash. Assets be anything from your car, house, machinery or yep, cash.

Recession: A period in time in which the economy endures a decline, or a wide-spread drop in value.

Net Income: Your net income is the amount of money you have once remaining you subtract all of your overheads such as taxes, depreciation and so on. Net Income can also be referred to as 'The Bottom Line.'

Inflation: Inflation is an ongoing, significant rise in the overall level of prices which occurs as a result of an increase in the volume of money available which results in currency reducing in value.

Equity: Equity can be defined as the monetary value of either your home or your business, once you deduct the amounts still owing on it such as mortgages etc.

Investment: Whether you're referring to property or finance, investment is essentially the purchase of either a financial property or asset (house etc.) with the expectation of positive financial returns.

Stock: At the most basic level, a stock signifies ones part-ownership in a corporation. If you purchase stocks in a particular company, you are entitled to a proportional share of that company's profits and assets.

Capital: The initial cash or goods that are investing to generate further income.

Due Diligence: Doing your 'Due Diligence' refers to putting in a responsible and reasonable amount of investigation into your potential investment.

Broker: An individual who acts as the 'middleman' between yourself and person you're investing with. It isn't uncommon for a broker to take a commission on the deal once it is complete.

Author's Bio: 

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