Financial Glossary
Last updated: 2026
This glossary provides simple explanations of common financial terms referenced throughout Maple Wealth Guide. These definitions are for general educational purposes only.
Note: This glossary provides general definitions for educational purposes. Specific applications of these concepts may vary based on individual circumstances. Consult a licensed professional for personalized guidance.
Asset Allocation
The process of dividing investments among different asset categories, such as stocks, bonds, and cash equivalents.
Bond
A debt security where an investor loans money to an entity (government or corporation) that borrows the funds for a defined period at a fixed interest rate.
Capital Gain
The profit realized when a capital asset (like stocks or property) is sold for more than its purchase price.
Compound Interest
Interest calculated on both the initial principal and the accumulated interest from previous periods.
CPP (Canada Pension Plan)
A contributory, earnings-related social insurance program that provides retirement, disability, and survivor benefits to contributors and their families.
Diversification
An investment approach that spreads investments across various assets to reduce exposure to risk from any single investment.
Dividend
A portion of a company's earnings distributed to shareholders, typically paid quarterly.
ETF (Exchange-Traded Fund)
An investment fund traded on stock exchanges that holds assets such as stocks, bonds, or commodities, typically tracking an index.
GIC (Guaranteed Investment Certificate)
A Canadian investment that offers a guaranteed rate of return over a fixed period.
Index Fund
A type of mutual fund or ETF designed to track a specific market index, such as the S&P/TSX Composite.
Inflation
The rate at which the general level of prices for goods and services rises, reducing purchasing power over time.
MER (Management Expense Ratio)
The total annual cost of managing and operating an investment fund, expressed as a percentage of the fund's average assets.
Mutual Fund
An investment vehicle made up of a pool of money collected from many investors to invest in securities like stocks and bonds.
OAS (Old Age Security)
A monthly payment available to Canadians aged 65 and older who meet residency requirements, funded by general tax revenues.
Portfolio
A collection of investments held by an individual or institution.
RRIF (Registered Retirement Income Fund)
A retirement income arrangement that uses funds from an RRSP to provide regular income in retirement.
RRSP (Registered Retirement Savings Plan)
A Canadian retirement savings account where contributions are tax-deductible and growth is tax-deferred until withdrawal.
Risk Tolerance
The degree of variability in investment returns that an individual is willing to accept in their investment portfolio.
Stock
A type of security that represents ownership in a corporation and a claim on part of its assets and earnings.
TFSA (Tax-Free Savings Account)
A Canadian savings account where contributions are not tax-deductible, but investment growth and withdrawals are tax-free.
Volatility
A statistical measure of the dispersion of returns for a given security or market index; often associated with the degree of risk.
Yield
The income return on an investment, such as interest or dividends, usually expressed as an annual percentage.
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