MINTMoney glossary
Plain-language meanings of the words you will meet when you learn about money and investing in Ghana.
A
- Asset
- Something you own that has financial value, such as savings, investments, business equipment, property or a vehicle. Read the lesson
B
- Bond
- A loan you give to a government or company that pays interest over time and returns your money on a set date. Bonds usually run longer than Treasury bills. Read the lesson
- Brokerage commission
- The fee a stockbroker charges for buying or selling shares for you, usually a percentage of the trade, often with a minimum amount. Read the lesson
C
- Capital gain
- The profit you make when you sell an investment for more than you paid. It is only real once you sell; until then it is a gain on paper. Read the lesson
- Central Securities Depository (CSD)
- The institution that keeps the electronic record of who owns shares and government securities in Ghana. You get a CSD account through your broker or bank. Read the lesson
- Collective investment scheme
- A fund that pools money from many investors and invests it together. In Ghana these are mutual funds and unit trusts, regulated by the SEC. Read the lesson
- Compounding
- Earning returns on your earlier returns as well as on your original money, so growth speeds up over time. Read the lesson
- Contract note
- The confirmation your broker sends after a trade, showing what was bought or sold, the price, the total and every fee. Keep it as your record.
- Custodian
- A separate institution, usually a bank, that holds a fund's assets safely, apart from the company that manages the fund. Read the lesson
D
- Discount rate (T-bill)
- The gain on a Treasury bill measured against its face value. The interest rate, which is slightly higher, measures the gain against the price you actually paid. Read the lesson
- Diversification
- Spreading your money across different investments so that one bad result does not do too much damage.
- Dividend
- A share of a company's profit paid to its shareholders, quoted as an amount per share. It is decided by the company's board and is not guaranteed. Read the lesson
- Dividend yield
- The yearly dividend divided by the share price, shown as a percentage. A dividend of GHS 0.10 on a GHS 2.00 share is a 5% yield. Read the lesson
E
- Emergency fund
- Money set aside only for surprises such as a job loss or a medical bill. A common guide is three to six months of essential costs. Read the lesson
- Equity
- Ownership in a company. Shares, stocks and equities all mean the same kind of ownership. Read the lesson
F
- Face value
- The amount a bond or Treasury bill promises to pay you when it matures.
- Fixed deposit
- Money you lock with a bank for an agreed period at an agreed interest rate. Read the lesson
- Fund manager
- The licensed company that decides what a mutual fund or unit trust invests in. In Ghana it must be licensed by the SEC. Read the lesson
G
- Ghana Stock Exchange (GSE)
- The market where shares of listed Ghanaian companies are bought and sold through licensed brokers. Read the lesson
- Gross profit
- Sales minus the direct cost of what you sold, before running costs such as rent and wages. Read the lesson
- GSE Composite Index
- A number that tracks how the shares listed on the Ghana Stock Exchange are doing overall. Read the lesson
I
- Inflation
- The general rise in prices over time, which reduces what each cedi can buy. In Ghana the Ghana Statistical Service measures it. Read the lesson
- Initial public offering (IPO)
- The first time a company offers its shares to the public to raise money. After that, investors trade the shares among themselves. Read the lesson
- Interest rate (T-bill)
- The return on a Treasury bill measured against the price you paid, stated as a yearly rate. Use it to compare a T-bill with a bank deposit. Read the lesson
L
- Liability
- Something you owe, such as a loan, credit purchase, mobile loan or money borrowed from someone. Read the lesson
- Licensed dealing member (LDM)
- A stockbroking firm licensed to trade on the Ghana Stock Exchange for clients. You buy shares through one. Read the lesson
- Liquidity
- How quickly you can turn an investment back into cash without losing value. Savings are very liquid; land is not.
M
- Maturity
- The date a Treasury bill, bond or deposit ends and you get your money back. Read the lesson
- Money market fund
- A fund that lends money short term to banks and government. It is usually lower risk than shares but is not a bank deposit. Read the lesson
- Mutual fund
- A pool of money from many investors, managed by a licensed fund manager who invests it in things such as bills, bonds and shares. Read the lesson
N
- Net profit
- What is left after every cost of running a business, including rent, wages, transport and loan interest. Read the lesson
- Net worth
- What you own (assets) minus what you owe (liabilities). It can be negative. The useful part is whether it moves up over time. Read the lesson
P
- Price-to-earnings (P/E) ratio
- The share price divided by earnings per share. It shows how much investors pay for each cedi of yearly profit. Read the lesson
- Primary dealer
- A licensed institution allowed to bid directly at government Treasury bill auctions, and to bid for other investors. Read the lesson
- Profit margin
- Profit divided by sales, shown as a percentage. It tells you how much of each cedi of sales you keep. Read the lesson
R
- Real return
- Your return after taking away inflation. A positive real return means your money is gaining buying power. Read the lesson
- Revenue
- All the money a business earns from selling its goods or services, before any costs are paid. Read the lesson
S
- Secondary market
- Where investors buy and sell existing shares or bonds among themselves, such as the Ghana Stock Exchange after a company has listed. Read the lesson
- Securities and Exchange Commission (SEC)
- The regulator of Ghana's capital market. It licenses brokers and fund managers, and publishes warnings about unlicensed schemes. Read the lesson
- Settlement
- The final step of a trade, when the shares move into the buyer's CSD account and the money goes to the seller. Read the lesson
T
- Total return
- Everything an investment earns: dividends or interest received plus any change in its price. Read the lesson
- Treasury bill (T-bill)
- A short-term loan to the government, usually for 91, 182 or 364 days. You pay less than face value today and receive the full amount at maturity. Read the lesson
U
- Unit trust
- A fund where investors own units. Each unit's price follows the value of the fund's investments. It works much like a mutual fund. Read the lesson
W
- Withholding tax
- Tax taken from a payment before you receive it. In Ghana, dividends commonly have 8% withheld, so check the current rule with your broker. Read the lesson