Find your starting point
Search a term, choose a topic or browse alphabetically.
30 terms found
Financial position
For a personal net worth record, an asset is something of value included in the selected person's, household's or entity's financial picture.
Understand the termSaving & investing
Asset allocation is the way a portfolio is divided among asset categories, such as cash, shares, property and fixed interest. It describes the mix, not just the total value.
Understand the termOwnership & records
A beneficiary is a person or entity who may have an interest under a particular legal arrangement, such as a trust or policy, depending on that arrangement's rules and documents.
Understand the termFinancial position
Cash flow describes money coming in and going out over a period. It helps explain timing and available cash, rather than the total value of what you own.
Understand the termLoans & credit
A comparison rate combines a loan’s interest rate and certain fees into one annual percentage using specified assumptions. It helps explain more of the cost than the interest rate alone.
Understand the termSaving & investing
Compound interest is interest calculated on an amount that already includes earlier interest. The balance used for the next calculation grows when interest is added.
Understand the termLoans & credit
A credit limit is the maximum borrowing amount approved for a credit facility, subject to its terms. It is different from the amount currently owed.
Understand the termSaving & investing
Diversification means spreading investments across different exposures, such as asset types, industries or countries. It can reduce concentration risk but cannot remove every risk or guarantee a profit.
Understand the termOwnership & records
A financial inventory is a structured list of what financial records exist, how they relate and where the supporting information can be found.
Understand the termLoans & credit
A fixed interest rate stays unchanged for an agreed period. That period may be shorter than the full loan term.
Understand the termFinancial position
Simple home equity is a property's estimated value minus the debt associated with it.
Understand the termInsurance
An insurance excess is the amount you contribute towards a claim when it applies. A policy can have different excesses for different circumstances.
Understand the termInsurance
A useful policy record identifies the insurer, the cover or asset involved, key dates and where the current policy schedule can be found.
Understand the termInsurance
An insurance premium is the amount paid for insurance cover. It is separate from the policy’s cover amount and any excess payable on a claim.
Understand the termOwnership & records
A joint ownership record identifies that more than one person or entity is connected to an asset and records the shares or relationship you have entered.
Understand the termFinancial position
In a personal wealth record, a liability is a debt or amount you owe within the scope of the calculation.
Understand the termFinancial position
Liquidity describes how readily an asset can be turned into available cash without a substantial price reduction. Access restrictions can also matter.
Understand the termLoans & credit
Loan-to-value ratio (LVR) expresses a loan amount as a percentage of the value of the property used for the comparison.
Understand the termFinancial position
Net worth is the total value of assets in the chosen scope less the total liabilities in that same scope. It is a snapshot based on the values and balances used.
Understand the termLoans & credit
An offset account is a separate transaction account linked to a home loan. Its eligible balance reduces the loan amount used to calculate interest; it does not itself repay the loan.
Understand the termLoans & credit
An outstanding balance is the amount still owed on an account at a stated time. It can include more than unpaid principal, depending on the account and statement.
Understand the termLoans & credit
Principal is the underlying amount borrowed or invested, separate from interest. On a loan statement, the outstanding principal is the part of that amount still unpaid.
Understand the termLoans & credit
A redraw facility may let you access extra repayments you have already made on a loan. Availability, limits and timing depend on the lender’s terms.
Understand the termLoans & credit
A secured loan is backed by an asset provided as security. If the borrower does not meet their obligations, the lender may have rights over that asset.
Understand the termInsurance
The sum insured is an amount specified for insurance cover. What an insurer actually pays depends on the covered event, policy limits, conditions and claim assessment.
Understand the termSaving & investing
Superannuation is money saved in Australia's retirement system. For a broad net worth snapshot, a recorded super balance may be included as an asset; access to it follows separate rules.
Understand the termOwnership & records
A trust is a legal relationship in which a trustee holds or manages property under the applicable trust arrangements for beneficiaries or purposes. Its exact rights and duties depend on the deed and law.
Understand the termOwnership & records
A trustee is a person or entity with responsibilities for administering trust property under the trust's legal arrangements.
Understand the termLoans & credit
An unsecured loan is not backed by a particular asset pledged as security. The borrower still has an obligation to repay it.
Understand the termLoans & credit
A variable interest rate can change during the loan term. A rate change can affect the interest charged and the repayments required.
Understand the termStart with net worth: assets minus liabilities. Then check how the assets and debts are valued, owned and dated.
Start with what you have
You do not need every detail on day one. Start with the records that matter most, then build a clearer picture at your own pace.
