Capital Gain or Capital Growth
The difference between what you paid for an asset (including buying costs) and what you got when you sold it (less the selling costs). If you happen to own Elvis' white jumpsuit you are likely to make a pretty heft capital gain when you sell it.
Capital Gains Tax
This is the tax payable on the profit you make from selling a capital asset. So congrats if you have just sold Elvis's jump suit (see Capital Gain) but just wait until your capital gains tax bill comes in.
Cash withdrawn from a credit card. Beware! A transaction fee is usually charged and interest is calculated on the withdrawal immediately until it is paid back. The average credit card interest rate is between 15 and 20% so it is effectively like a high interest loan.
See Cash Management Trust. Money invested in a short term, interest paying investment. A bank account is a simple example of a cash investment. A fancy example is a promissory note. Throw that out there at your next BBQ.
Cash Management Account (CMA)
A Cash Management Account is a bank account with typical banking facilities such as a debit card or cheque book. As it is a bank account and not an investment fund (see CMT) the returns are based on money market returns and typically would be slightly lower than a CMT.
Cash Management Trust (CMT)
A type of management fund investment where the assets are invested in cash securities. Examples are government securities, promissory notes and bills of exchange. CMTs typically pay a higher interest rate than a traditional bank account due to the underlying assets being invested rather than held on account. CMTs can be suitable for investing cash for the short term such as saving for a holiday in 12 months time.
A payment made by the government to your super fund if you make a personal super contribution and meet certain conditions. To be eligible you need to earn less than $34,488 (2014/15 year), pop $1000 into super for the government to put in $500. You are ineligible if you earn over $49,488. If you are in between you will get a bit. These are based on the 2014/15 financial year rates.
Sounds grown up. It means property or assets you put up for security for a loan. It can also mean a person having the same ancestor as someone else. Don't mix the two.
A rate that helps you work out the true cost of a loan. It includes the interest rate and most fees and charges all converted back to a single percentage figure. Don't be impressed by the fancy headlines you want to know what the comparison rate is for the real deal.
According to Albert Einstein (Heard of him? He was an old smart guy.) compound interest is the eighth wonder of the world. In essence it is interest on interest. If you invest $100 and it earns 10% interest you have $110. This amount is 'compounded' when the 10% interest is now calculated on the total amount ($110) and becomes $121. If we do this again it is $133.
Concessional Contributions (CC)
A type of contribution made to super. CC's are full of their own importance as they like to be known by different names. AKA pre tax or salary sacrifice contributions. Employer contributions are also counted as CCs. CCs are taxed at 15% when they go into super and there is a limit on how many CCs you can throw into super, known as a Concessional Contributions Cap. Not hat, visor or beret. Just cap.
Concessional Contributions Cap
A limit on the amount of concessional contributions that can go into super. For the 2014/15 financial year the limit is $30,000. If you are over 50 you have a higher cap of $35,000 for the same financial year. If you exceed your contributions cap you will enjoy a total penalty tax of 46.5% and it will be counted towards your non concessional cap limit.
Condition of Release
Relates to super. A condition of release is being able to tick a box to say you have met a certain status and can therefore access your super. Examples are retiring or reaching age 65. This is only half of the equation as you also have to be old enough which is called your preservation age. Sorry to everyone out there who were racing to retire at 25 and access their super. You'd better read the section on preservation age first.
Consumer Price Index (CPI)
Is a quarterly measure of inflation. What the average consumer spends on goods and services such as housing, clothing, health, alcohol, transport and so on is represented by a basket of goods. If the cost of the stuff in the basket goes up inflation is said to have risen. If the cost of the stuff goes down inflation has decreased. Normally the basket is a bit of a mix, say transport has increased but the cost of clothes is cheaper so it gives an overall picture. It makes the Reserve Bank of Australia (RBA) happy if inflation hangs around the target range of 2 to 3% a year.
Money paid into super is called a contribution. There are three types of contributions. First are employer, or Super Guarantee Contributions (SGC) which is the amount work has to put into your super. This is currently 9.25% of your annual salary. Second are pre tax or salary sacrifice contributions. Third are post tax or personal contributions. You need to be aware of the contribution limits when putting money into super. Contributions are strange creatures as they like to be known by different names. When in the mood pre tax contributions are also called Concessional Contributions and post tax contributions are also called Non Concessional contributions.
A 15% tax that is applied on all concessional contributions. This includes employer, pre tax or salary sacrifice contributions. High income earners (over $300,000) pay an additional 15% contributions tax on top of this.
A document that contains the details of a loan, including the term, interest rate, fees and charges and repayments. It you are borrowing money you will receive a credit contract. Legally credit providers must provide this to you.
A file kept by a credit reporting agency that shows your credit history. Lots of information is recorded on your credit file such as where you have lived, where you have worked, if you owe any money and so on. Lenders will access your credit file to decide if they want to lend money to you. If you have any defaults such as outstanding doctors bill this will be listed on your credit file and is a black mark against you. Every time you apply for credit, be it a mobile phone, credit card or an interest free deal this will be recorded on your credit file. You can get a copy of your credit file for free. Visit http://www.mycreditfile.com.au/home/free-credit-file.dot
You must be provided with a Credit Guide by anyone engaging in certain credit activities with you (eg home loan). The Credit Guide contains information about the lender, their licence number, how they get paid, who they deal with and a dispute resolution process.
An assessment of the credit-worthiness of individuals and corporations, based on their borrowing and repayment history. For example they have checked Jane Spendalot’s credit file and found she had applied for five credit cards last month, never paid her mobile phone bills and had changed job twenty times in the last year. Their credit rating assessment of her is unlikely to be favourable.