Financial Glossary – T


Tailor Made – if my clothes are tailor made, somebody made them specifically for me – according to my instructions or preferences. Tailor made, custom made, or bespoke products contrast with off the shelf or off the rack goods.

Takeover – also called an acquisition, is when one company acquires the majority or controlling interest in another company, in most cases through the purchase of its shares. Put simply, when one firm buys another firm. There are many types: friendly, hostile, reverse and backflip takeovers. The purchasing company is known as the acquirer or bidder, while the company being bought is called the target. As a noun it is one word – takeover – but as a verb it consists of two words – to take over.

Tangible Assets – these are assets we can touch because they have a physical form, unlike intangible assets. Examples of tangible assets include land, buildings, equipment, cash, and inventory.

Target Audience – the people who you believe are most likely to buy your product or service. They are the ones who will respond most positively to your message. Advertising campaigns are directed at them.

Tariffs – duties or taxes that are levied on imported products. The purpose is either to protect domestic suppliers and jobs at home, or raise revenue for the government. Tariffs and quotas are two weapons that countries can use to improve their balance of trade and protect domestic producers.

Tax – an amount of money that has to be paid to the government based on a person’s income, a company’s profit, how much a dead person bequeathed, or the cost of goods or services bought. Tax is compulsory. If you deliberately cheat the tax authorities and don’t pay, you could be facing a fine or even jail time.

Tax Avoidance – everything we do to reduce our tax bill, that is, everything we lawfully do. Tax avoidance, unlike tax evasion, is legal. If I want to avoid tax, I need to find an accountant who specializes in taxes, and ask him or her to advise me on how to reduce my tax bill.

Tax Evasion – illegal methods used to not pay tax. Examples of tax evasion include circumventing or frustrating tax laws, deliberately understating taxable income, willful non-payment of taxes that are due, and hiding your money.

Tax Haven – also known as a secrecy jurisdiction, is a country, territory, or part of a country that offers very favorable tax rates and other conditions, especially to foreigners who deposit their money there. Tax havens are commonly used by tax avoiders and tax evaders, who place their money there legally or illegally (respectively).

Tax Return – an official form that taxpayers fill in with details of their income and personal situation. It helps people and businesses calculate how much tax they owe or are owed.

Technology – the application of scientific knowhow for practical purposes. If you solve practical problems using your scientific knowledge, you are using technology. It has been with us since we first set food on this Earth.

Telecommunications – communicating at a distance. Also known as telecom, today the term usually means communicating over long distances using hi-tech equipment, such as satellites, fiber optics, mobile phones, laptops, the Internet, TV or radio broadcasting, and telegraphs. It all started off many thousands of years ago with smoke signals and beating drums.

Telecommuting – also called teleworking, means working away from the office, remotely, which in the majority of cases means working from home. The person engaged in telecommuting is called a telecommuter or teleworker. Telecommuting has become much more common since the Internet emerged at the end of the last century.

Telemarketing: refers to contacting potential customers, usually by phone, in order to get them to buy something, pay for a service, contribute to a charity, reveal their preferred party in the next elections, provide feedback, make an appointment, receive a free sample, or to take part in a survey. Telemarketing can be business-to-business (B2B) or business-to-consumer (B2C). The term may also refer to using fax or the Internet for marketing purposes.

Teleworking – also called ‘telecommuting’, means working remotely. This could be working at home, in a cafe, in a designated work center, on a train, etc. A person who teleworks is a teleworker or telecommuter. Teleworking is becoming progressively more popular in most parts of the world. It offers several advantages to both the employer and employee.

Tenant – an individual or entity that leases property from a landlord for residential or commercial use.

Testimonial – in the world of business and marketing, refers to a written or spoken statement from a satisfied customer endorsing a product or service, often used to build trust and credibility with potential customers.

Text – a short message that one cell phone can send to another. Texting is the act of sending and receiving such messages.  The term can also refer to an extract, passage, or body of writing, either handwritten or printed.

Third Way – an ideology that is at the center of the political-economic spectrum. The Third Way is neither socialism nor capitalism, it is eclectic – it takes from both left-wing and right-wing approaches, combining the two into a middle way. The Third Way was initially promoted by US President Bill Clinton and British Prime Minister Tony Blair in the 1990s, and then the German, Italian, Dutch and other European leaders. Today, the Third Way is rarely mentioned – some say its outlook is bleak.

Threshold – the point at which something changes or begins to belong to a particular class. Tax-free threshold is the amount of income for which no income tax is payable. Your pain threshold is the level at which pain starts to be felt. People with a low fear threshold get scared easily.

Tidal Power – or tidal energy is a type of hydropower. With tidal power, we capture the energy in moving water and convert it into electricity. It is a type of renewable energy, i.e., its source never runs out.

Tier 1 Capital – this is a bank’s core capital. As opposed to Tier 2 capital, it is considered to be more reliable.

Tier 2 Capital – an element used to measure a bank’s total capital base. This form of capital is considered to be riskier than Tier 1 capital.

Time Value of Money – the concept that money has a higher value today than at any future date, because it can grow with time. Also called present discounted value.

Tip – the word may mean a gratuity (money) that you give to a waiter or hairdresser, or the pointed end of something. It may also refer to a useful piece of advice or information. If a room is a tip, it means that it is a mess.

Title Loan – a type of secured loan in which the borrower puts up a possession, such as a vehicle, as collateral. If the borrower defaults, the lender can seize that item.

Top-Down Investing – a strategy that starts with analyzing the global economy, then sectors, and finally individual stocks, prioritizing macroeconomic over company-specific factors in the investment decision-making process.

Tort – a civil wrong that causes somebody loss or harm. Tort law aims to prevent future occurrences and to compensate the harmed party or parties.

Total Return – the actual rate of return of an investment, calculated by including interest, dividends, capital gains, and distributions realized over a specific period. It is the total return on an investment or portfolio of investments that takes into account both the capital appreciation on the portfolio as well as the income received on it.

Toxic Assets – financial assets whose value has declined significantly, will probably continue falling, and for which there is no longer a functioning market.

Toxic Debts – debts that are not likely to be paid back to borrowers. Essentially toxic debts are a class of assets that were once of value (or were believed to hold value) but are now worthless or have almost completely declined in value.

Track record – a reference to past performance that people often use to imply that future performance will be similar. A management consultant, for example, may assure clients that they are right for the job because of their track record of success in their industry.

Trade – the activity of purchasing, selling (exchanging) goods or services within a country or between nations. Trade may also refer to the volume of activity within a business enterprise, industry, etc. A trade may be a particular skilled job, especially a manual one. It also means to buy-sell shares, bonds and other financial instruments on a stock exchange.

Trade Agreement – a legally binding pact between two or more countries that sets terms for mutual trade, typically aiming to reduce or eliminate tariffs and regulate market access.

Trade Area – also known as a market area, is the area in which a company does business; its commercial territory. The trade area of a shopping center, wholesaler, or department store is the geographical area where sales are made. Trade areas tend to be smaller for cheap, everyday goods, such as groceries and gasoline, and larger for more expensive items, such as furniture. In other words, we are willing to travel further to buy expensive dining room furniture than to fill our cars with fuel.

Trade Barrier – a government-imposed restriction on the international exchange of goods and services, aimed at protecting domestic industries and controlling economic activity across borders.

Trade Credit – an arrangement whereby customers can pay for goods or services received at a later date, generally 30, 60 or 90 days later. For many businesses, it is a useful way of improving cash flow.

Trade Deficit – also known as a trade gap, it is defined as being a negative commercial balance. It occurs when a nation imports more products than it exports.

Trade Show – also known as a Trade Fair or Exposition, is an exhibition in which many businesses promote their goods or services. Most of them focus on a particular market sector or industry.

Trade Surplus – a positive measurement of a country’s balance of trade. Specifically it refers to a positive balance of trades – when a country exports more than it imports.

Trade Union – a group of workers that collectively tries to improve or maintain their wages and workplace conditions.

Trademark – spelled as such in the USA, ‘trade-mark’ in Canada, and ‘trade mark’ in the rest of the English-speaking world, is a symbol or sign used to distinguish a company’s goods or services from those of other businesses. The trademark is legally registered or established by long-term use as representing a product or company.

Trader – somebody who buys and sells goods or services. A person who buys and sells cattle is a cattle trader. In finance, a trader is somebody who purchases and sells financial instruments. There are other types, such as market traders and sole traders.

Trainee – an individual in the process of acquiring skills and knowledge through practical experience for a specific job or career path.

Training – the action of teaching a person a specific skill. The term also refers to teaching a specific type of behavior. People or animals can be trained. In companies, training programs aim to improve a worker’s capacity, performance, productivity, or capability.

Transaction Costs – costs incurred by purchasers and sellers during trading, apart from the price of the good that is changing hands. Transaction costs may refer to an underwriter’s fee, lawyer’s fee, broker’s fee, or other financial intermediary charges. When deciding whether your company should make something or buy it, transaction costs are a critical factor.

Transition Economy – a country that is changing from being a communist state to having a free-market economy. The nation’s economy is moving from one where the state planned everything to a capitalist or mixed-economy system – where market forces determine what happens. Examples include Russia, China, Vietnam, Ukraine, Poland, Laos, Cambodia, Hungary, Romania, and the Czech Republic.

Transparency – in business, the term refers to the extent to which investors, shareholders and other stakeholders have ready access to a firm’s or market’s data, such as price levels, market depth, financial reports, and other planned actions. In government, transparency refers to how much data a nation’s government shares with its people.

Treasury Bills – these are short-term maturity promissory notes that national governments issue to raise funds or regulate the money supply through open-market operations. Time to maturity may range from a few days to fifty-two weeks. They contrast with treasury notes and treasury bonds, whose time to maturity range from 1 to 10 years and more than ten years respectively.

Trend – a general direction into which something is veering toward, developing, or changing. It may also mean a fad or craze. In financial markets, a bullish trend exists when prices are rising, while a bearish trend is when they are falling.

Trials – tests of quality, suitability, or performance of people or things. A trial in a court of law is where the formal examination of evidence occurs before a judge, and often a jury. Horse trials are equestrian events in which horses and their riders take part in several different contests. When we test new drugs and treatments on human volunteers, we call them clinical trials.

Trough – in economics and statistics, it is the point in the business cycle between the final part of a recession and the beginning of accelerating GDP growth. In a graph, the trough is the bottom of the ‘V’ shape, where the falling and rising lines meet. In non-business English ‘trough’ has many meanings, including the narrow, open container that animals eat/drink from; a long, narrow container used for growing plants; the lowest part of two waves in a sea or lake; a long hollow in the Earth’s surface; a channel that water flows through; and in medicine, the lowest concentration of a drug in a human’s bloodstream.

Trust – the firm belief in the truth, reliability, or ability of something or somebody, is one of the most important ingredients for a successful business. Without trust, our world today would be a very different place – significantly poorer and more backward. A trust may refer to an arrangement in which one person – the trustor – gives control of his or her estate/property to a trustee for the benefit of a third party – the beneficiary.

Trust Fund – or ‘Trust‘ is a fund where assets are transferred to be managed by a trustee. The trust aims to benefit either a person, organization, or charity. There are three people in a trust fund: 1. The grantor. 2. The beneficiary. 3. The trustee.