Dictionary 2017-01-23T08:54:45+00:00

Dictionary

I wanted to (finally) give you a money dictionary that doesn’t require a dictionary to understand the word’s definition. That doesn’t exist . . . so I made my own. You know how you explain a term to a friend who doesn’t “get” it? That’s the way it’s written here. Let this glossary be your go-to guide for definitions with a practical perspective whenever you need a little cheat-sheet. Some stuff changes over the years, but these basics never go out of style.

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Headhunter -  Not some guy with a spear who wants to make soup out of you; this is a recruiter who has been hired to fill a position at a company.
Health Savings Account (HSA) -  Health Savings Account (HSA): An account into which employees can choose to put pretax money from their paychecks to cover high health insurance deductibles and other noncovered medical expenses, like copays and contacts. Unlike an FSA (flexible spending account), any unused money in the account rolls over to the next year and earns interest that is also tax- free. If you’ve got money left in your HSA when you turn sixty- five, you get to spend it on anything you want. (See also: flexible spending account)
Hedge -  To act in such a way so as to reduce risk.
Hedge Fund -  Hedge Fund: Hedge funds are pools of money collected together for investment purposes. They’re not regulated by the government, so they’re even riskier than publicly traded stocks, and they’re not open to everyone, usually only “qualified investors,” a term that most of us would define as “wealthy.” Hedge funds can and do invest in just about anything, and can be both long and short at the same time—hence the term “hedging,” or protecting yourself from the risk involved with that investment.
Home Equity Line of Credit -  Home Equity Line of Credit: This is like a home equity loan, but instead of giving you a lump sum, the bank holds onto it, allowing you to draw on it as you need it up to the maximum amount. (See also: Home Equity Loan)
Home Equity Loan -  Home Equity Loan: Also known as a second mortgage, this type of loan allows homeowners to borrow against the value of their home. The amount of the loan is based on the difference between your equity in the home and the home’s current market value . . . so basically you’re borrowing the amount that you could hypothetically stand to pocket by selling it.
Hostile Takeover -  When one company acquires another one by force, typically by bypassing management (or replacing management altogether) and going directly to that company’s shareholders. This can happen when they buy substantial amounts of stock, thus buying the company from the bottom up. The key characteristic here is that the company being taken over (also called the target) doesn’t want the deal to go through, while the company doing the taking over (also known as the acquirer) is doing everything it can to make the deal happen.