Financial Acronyms Cheat Sheet: Your Quick Reference Guide

ETF

Exchange-Traded Fund

A basket of investments that trades like a stock. Low cost and popular for diversification.

NAV

Net Asset Value

The per-share value of a fund’s assets minus liabilities.

IPO

Initial Public Offering

When a private company offers shares to the public for the first time.

RSU

Restricted Stock Unit

Company stock granted to employees, typically vesting over time.

ESPP

Employee Stock Purchase Plan

Lets employees buy company stock, often at a discount.

REIT

Real Estate Investment Trust

A company that owns income-producing real estate; offers dividends and liquidity.

IRA

Individual Retirement Account

A tax-advantaged account for retirement savings. Can be Traditional or Roth.

401(k)

Employer-Sponsored Retirement Plan

Lets employees save for retirement with tax benefits; often includes employer match.

RMD

Required Minimum Distribution

Minimum amount you must withdraw from retirement accounts after a certain age.

QCD

Qualified Charitable Distribution

Allows IRA owners to donate directly to charity, satisfying RMD requirements.

Roth IRA

Roth Individual Retirement Account

Contributions are after-tax; growth and withdrawals can be tax-free.

AGI

Adjusted Gross Income

Your total income minus certain deductions.

MAGI

Modified Adjusted Gross Income

AGI with some deductions added back; determines eligibility for tax benefits.

AMT

Alternative Minimum Tax

A parallel tax system to ensure high earners pay at least a minimum tax.

FIFO / LIFO

First In, First Out / Last In, First Out

Methods of calculating cost basis for investments or inventory.

TEY

Tax-Equivalent Yield

Compares municipal bond yields to taxable bond yields. Useful for high-income investors.

AUM

Assets Under Management

The total market value of assets a firm manages for clients.

CFP®

Certified Financial Planner™

A professional designation indicating rigorous financial planning training and ethics.

LTC

Long-Term Care

Services for chronic illness or disability, not covered by regular health insurance.

HSA

Health Savings Account

Tax-advantaged account to pay for qualified medical expenses. Triple tax benefit.

FSA

Flexible Spending Account

Pre-tax money for healthcare or dependent care; use-it-or-lose-it rules apply.