Financial Literacy

Sum-of-years digits is another accelerated depreciation method that applies a percentage of depreciation based on the years left in an asset’s useful life.

Tax-advantaged accounts allow you to reduce taxes on your income. A traditional IRA is tax-deferred, and a Roth IRA is tax-exempt.

A trailing stop order is a stop-loss policy where a sell order is executed once the stock’s price drops by a specified percentage.

Taxable investment accounts are investment accounts that are taxed at a standard rate. They do not have tax-advantaged benefits.

A share of stock is a unit of investment that represents ownership in an entity. Shares are usually issued when companies or funds want to raise capital.

A shareholder is any person, company or organization that owns one or more shares of a company. This ownership stake is an investment vehicle.

Short selling hopes prices decrease so they can buy back the shares at a lower price and keep the difference. This carries high risk.

A sole proprietorship is owned by an individual, and the individual is responsible for all debts of the business. It is not a separate entity.