Financial planning represents a major concern as you begin your adult life, and the investments you make today will prepare you for the future. Sadly, most people don’t receive the financial education they need to make wise choices. It will be up to you to learn what you can about financial planning. This may mean taking a course on investing, or reading books written by the successful investors you admire. First, however, you will need to learn a few basic terms.

Earnings Report – This is the income statement for a company, and it can be used to measure its earnings potential. It’s a report card for the business.

Dividend – A cash bonus paid to shareholders in a public company. The dividend is paid out when the company shows a profit in a given quarter, and other terms set out by the board of directors are met.

Fiduciary – A trustee appointed to manage the assets for another individual.

Financial Advisor – This is a professional who guides the investments for clients and helps them reach their investment goals. Investment managers and financial planners can also serve as advisors.

Margin – The margin is the fee that a client pays to the broker in exchange for using that broker’s credit. While the Federal Reserve sets margin limits, they can cost between 50% and 100% of the security’s purchase price.

Portfolio – This is the term used to describe the investor’s total collection of investments. A portfolio can contain stocks, bonds, and other types of investments, all of which are either managed by the financial planner or directly managed by the investor.

Prospectus – This is a detailed file about specific security. It’s required by the SEC to help investors make more informed decisions.

SEC – The Securities and Exchange Commission, or SEC, was formed in 1934 to protect investors and ensure a fair market. Members of the commission serve a five-year term, once they’re appointed by Congress and approved by the President of the United States.

Once you have taken the time to educate yourself about the world of financial planning, you’ll be ready to get started. Whether you hire a professional advisor or pursue an investment strategy on your own, everything you have learned up until this point will help you succeed.