The Raiz-opaedia of Financial Language (A to C)

06-04-2021

At Raiz, we know there are many complicated investment and financial words that are not easy to understand. We want to help you learn slowly through some terms that you might have heard in social media, newspaper etc. Maybe you know all of them or you know none, but hopefully, this list can create a new level of understanding for you.

We know there might be a lot to take in, so we are splitting this A-Z Raiz-opaedia easy-to-read into few parts.

Part 1 (A to C): 

Active Income 

Hard-earned money received from performing a work such as salaries, wages (basically your ‘gaji’), commissions, and income from businesses you participate in.

If you’re wondering, the money you receive from investments such as the dividend that Raiz investor just received on 1st April 2021 can be categorized as passive income. 

Benchmark 

A standard used as a way to measure an investment’s performance. For example, FBMKLCI is a benchmark for Bursa Malaysia. It provides a good overview of the overall Bursa Malaysia market performance. 

Bond 

A loan from investor to a company or government, so investors are paid interest over a specific time period. Just like when you borrow money and pay it back with interest. 

Bond

Bucketing  

Separating cash into different categories for specific purposes. This helps you to track your financial priorities. 

503020 Rule

One example of bucketing is the 50/30/20 Rule. Your budget can be categorized into three simple buckets: 

  • Your necessities (50%) 
  • Your wants (30%)
  • Your savings & investments (20%) 

Compounding  

The dividend you previously earned on your investment starts earning market returns as well. 

Due to the power of compounding, if you were to invest RM1,000 every year for 30 years, assuming average returns of 7% p.a. that investment could grow to be worth RM94,461. That’s a total return of RM64,461.** 

**Return estimated for the sake of simplicity as past performance is no indication of future performance.

 

That concludes part 1.  

Stay tuned for the next part of Raiz-opaedia easy learning! 

 


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Important Information 

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. 

The information on this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. 

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. 

The past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

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