Glossary of Terms


Throughout this web site we are going to use some financial terms. We will even have some blog articles that give examples of these terms as they are applied to real-life examples. Just in case we throw out some terms with which you are not familiar, here is a quick glossary:


Compound Tax –  The name of the effect an escalating tax has due to compounding of interest in taxable accounts. Coordination – The financial relationship between one asset and another.
Coordination Money – The money that which is used within the movement of cash flow between assets in a way that results in the improvement of the overall performance of either asset. Cost Basis – The initial amount of money saved of invested that originated from funds that has already been subject to income taxes.
Cost of Money – the rate at which money lost could have appreciated if it could have been kept or recaptured for economic use.Enjoyment of Wealth – The spending of one’s assets for needs, wants or desires.
Estate Engineering – The process focused on improving ongoing results associated with the growth, distribution and conservation structure of one’s assets and liabilities for legacy or estate transfer issues.External Design – The study of the efficient and effective flow of money into and out of the assets a person owns within the PS&G (Protection Savings & Growth) Model.
External Rate of Returrn – The rate of return that is a function of the gross rate of return (internal) minus the effect the outside factors of external costs such as taxes and inflation have on it.Economic Life Value – The economic worth of a person generally associated with the ability to earn income and produce assets over a future period of time.
Gross Savings Rate – The current before-tax stated earnings rate on savings assets.Ideal Strategy – The strategy using the same assumptions of a client’s present financial position, but without the effect of taxes or inflation.
Increase in Money Supply – The additional amount of money one would have in one specific financial strategy compared to a less favorable strategic alternative.Inflow – All financial income sources including compensation, dividends, interest, capital gains, appreciation, inheritance, governmental and corporate benefits, refunds, etc.
Integration – The movement of money from one asset to another that seeks increases in the future money supply and provides additional protection benefits.Integration Money – Money that moves from one asset to another that creates additional protection benefits and a potential increase in money supply of the time period being measured.
Internal Design – Selecting and structuring and given financial product or service to work more efficiently and/or more effectively.LEAP – The acronym for the Lifetime Economic Acceleration Program.
Lost Opportunity Cost (LOC) – In LEAP and the Wealth in Motion System, it is the amount of money that is spent and lost by an individual as a result of owning a particular asset or by using a particular strategy.Macro Cash Flow – The total outflow and inflow per time period.
Macro-Financial – The study of the overall aspects of all financial elements in a personal economic model.Macro-Manager – A person who uses a holistic strategic approaches. one who uses a linear, single-need approach.
Micro-Financial – The study of one element contained within a personal economic model.Micro-Manager – A person who uses a linear, single-need, strategic approach versus one who uses a more holistic approach.
Net Investment Rate – The after-tax hypothetical anticipated earnings rate on investment assets.Net Savings Rate – The current after-tax stated earnings rate on savings assets.
New Money – Future systematic contributions or deposits into financial products.No Additional Out-of-Pocket Outlay – Not having to outlay any additional money from earned income beyond what one is currently spending.
No Additional Risk – The intent of LEAP strategies to maintain or reduce financial risk by not adding more financial risk to one’s overall current risk tolerance.Old Money – The existing asset value of a financial asset.
Outflow – All financial expenses including ordinary living expenses, taxes, penalties, fees, commissions, charges, premiums, payments on debt, contributions to savings or investments, rents, etc.Performance Beyond Needs and Goals – A philosophy that one should not stop building additional financial assets just because one is on target or has already met their stated financial needs and goals.
Power of Attorney – A legal instrument authorizing one person to act on behalf of another.PS&G Model – A diagram that contains all financial products related to Protection, Savings and Growth positioned in a hierarchical value structure, plus a Debt Component that itemizes liabilities.
PS&G Model Strategy Worksheet – A worksheet showing the PS&G Model where internal, external and coordination design functions are performed.PS&G Model Present Position – The current state of one’s personal financial situation.
Rules-Based – The regulatory requirements or limitations applied to a particular type of money or asset.Tax-Deferred – The postponement of income taxes on earnings of assets until the time of distribution.
Tax-Free – An asset or income source that is not subject to income taxes.Tax-Deductible – The postponement of income taxes on contributions to assets and their earnings until the time of distribution.
Top Marginal Tax Bracket – The maximum income tax rate to be charged on any income source.Velocity of Money Concept – The average frequency with which a dollar may be spent, utilized, or from which benefits are received. Achieving an increased velocity of money within one’s personal economy typically results in additional wealth, income and other benefits.
Wealth Building – The financial process designed to obtain an increase in assets and benefits over a period of time.Wealth Conservation – The financial structure used to protect one’s assets from erosion due to income taxes, estate taxes, lawsuit, market declines, illiquidity, disability, illness, and other financial problems.
Wealth Coordination Account – A checking account that acts as an accumulation and distribution account for all financial flows of money.Wealth Distribution – The transfer of an asset from one individual to another person, business or government entity.
Wealth In Motion – The name of the process that uses the economic and scientific principles of money to establish efficient and effective wealth and protection benefits over time.