Glossary

When goods are paid for over time by payment of a deposit and then regular amounts over a certain period. You cannot take home the goods until you have paid the full price.

A document that grants someone the use of a property for a given period in return for rental payments. The document will specify the terms and conditions of the agreement.

Lenders mortgage insurance (LMI) protects a credit provider if borrowers are unable to repay their loan. LMI is usually a one-off cost to a home loan borrower, payable when the amount borrowed exceeds 80% of the value of the property. LMI does not benefit the borrower, it only protects the lender.

The use of financial instruments or borrowed capital to increase potential gains or losses. For example, borrowing money to invest in property or other assets, buying a share in a 'geared' managed fund or investing in derivatives.

A debt or money owed, for example, a bank loan or credit card debt.

Listed Investment Companies.

An insurance policy that pays a set amount of money to an insured person's beneficiaries when the insured person dies. Also known as term life insurance or death cover.

A life insurance policy pays a set amount of money to you or your family after an unexpected event, like an illness, injury or death.

Price limit for an order, e.g. a bid of $3.00 means that the buyer is not willing to pay more than $3.00 for the security.

Instruction to a broker to buy or sell a security at a specified price or better.

Company whose members have liability limited by shares or guarantee. In the case of the former, liability is limited to the amounts unpaid on the shares, in the case of the latter by the amount undertaken to be contributed in the event of a winding up of the company.

A loan used to purchase a single asset or group of assets where the lender's claim on assets is limited to the asset(s) purchased with the loan, if the borrower defaults on the loan.

Allows you to use a single account for your home loan and everyday spending. Interest is added to the loan each month and repayments are not necessary while the loan is within its credit limit.

Assets that can be bought or sold easily and with little impact on price.

Where buying and selling can be accomplished with ease and with little impact on price because of sufficient volume on offer.

A person appointed to administer the liquidation of a company

How easily an investment or financial product can be converted to cash. Shares in large publicly listed companies that are regularly traded on the ASX (Australian Securities Exchange) are considered liquid assets, while direct property investments are less liquid, due to difficulties and time delays that may be experienced when buying and selling. Liquid markets have enough trading activity to allow both buyers and sellers to easily transact as they wish.

ATO term - Low income super contribution - a government super payment to help low-income earners save for retirement. The LISC policy has been repealed as from 1 July 2017. LISC will be paid in relation to eligible concessional contributions made in the 2012-13 to 2016-17 financial years, with final determinations for LISC made by 30 June 2019.

Company which has agreed to abide by ASX Listing Rules so that its securities can be bought and sold on ASX.

Trust funds listed on a securities exchange and managed by an investment manager (also known as real estate investment trusts (REITs). May invest in a specific type of property such as residential, industrial, office buildings, shopping centres or hotels, or in a diversified portfolio of real estate assets either in Australia or overseas.

Rules governing the procedures and behaviour of all entities listed on ASX.

ATO term - Low income superannuation tax offset - a government super payment to eligible individuals that will generally ensure low income earners do not pay more tax on superannuation than their take-home pay. LISTO will apply to concessional contributions made from 1 July 2017.

The amount of a loan as a percentage of the value of the asset it was used to buy. It is calculated by dividing the loan amount by the value of the asset.

Trader who has bought or who holds a position that will benefit from rising prices.

A declaration by registered liquidators, pursuant to Section 104-145 of the Income Tax Assessment Act, that they have reasonable grounds to believe there is no likelihood that shareholders will receive any distribution for their shares.

Unit of trading equivalent to one futures contract.

European style options with a strike price of 1 cent, in the case of stock LEPOs, or 1 point, in the case of index LEPOs.

A loan that requires less financial documentation to prove income, assets and liabilities than a standard loan. Typically used by self-employed people and small business owners, they are usually offered at higher interest rates and may include terms that restrict borrowers.

ATO term - The amount of luxury car tax payable, as reported at label 1E on the business activity statement.