Here are three of the most common ones:

ROI

This stands for “return on investment” and it’s a way of measuring how profitable something is. It’s a number that compares the cost of something with how much money it makes.

The term ROI is also used generally to compare possible investments or even just potential expenditure. For example, instead of saying, “The expensive boots are worth it, because they’ll last much longer,” you can say, “The ROI on these boots is going to be far higher than on the cheap ones.”

Liquidity

Liquidity means “easiness of getting your cash out”.

A liquid asset is one that you can immediately get your money out of. If it’s hard to get your money out, it’s an “illiquid” asset. The most liquid assets are cash and money in the bank. With illiquid assets it takes a long time to find a buyer or negotiate to get your money out (like being part-owner of a business). A house is an illiquid asset, for example, because it will take you weeks, if not months, to sell.

So, instead of saying, “My bank account is nearly empty,” you could say, “I’m running low on liquid assets.”

The ultimate in illiquidity is when law enforcement seizes your assets, and you have no way of getting your money out: your assets are frozen.

Asset allocation

This sounds professional, but essentially means “what type of things you own”. When your KiwiSaver fund manager picks certain things to own, like more shares or more bonds, that’s asset allocation.

When you choose what to invest in, that’s your own asset allocation. You might have a KiwiSaver account, so some of your assets are allocated in shares, or a house, so a big chunk of your assets are invested in property.

So, instead of saying, “I just bought my first house and now I have no money left,” you can say “My asset allocation is heavily weighted towards real estate”.