GBR Terminology

52-Week Prosperity Plan: A plan here at Go Be Rich that introduces a new concept via one post every week to help you improve yourself, your situation, and your life. At the end of each week there will be a follow-up post detailing what I myself discovered and realized by focusing on that week's concept. Learn more about the 52-Week Prosperity Plan here.

Avalanche Method: A debt-reduction strategy that focuses on paying off debt in order of highest interest rate first. Financially this strategy makes more sense than the Snowball Method, however psychologically this may seem overwhelming and may be harder to stick to for some.

Compound Interest: Compound Interest is a type of interest in which the amount of interest is figured not only off of the principle, but on all accrued interest up to that point as well, as opposed to simple interest, which is only calculated off of the principle.

Discretionary Bills: Bills that do not have a determined amount. Examples would be things like amount you spend on groceries or how much you spend on entertainment. The opposite of these types of bills would be things like your car payment, mortgage, or cable bill.

Down Payment: A certain amount of cash paid upfront by the person seeking a loan in order to reduce the total amount of money being borrowed. Many lenders will require a down payment of some amount, depending on the type of loan, in order to provide them instant revenue and to reduce their risk of lending to you.

Habeas corpus: A right that every prisoner has to challenege their detainment in a court of law before a judge. Basically, if you're arrested for whatever, you have the right to be brought before a judge and contest your arrest.

Home Owner's Insurance: A type of insurance paid by a home owner that can insure the property against damage, the contents of the property, and reduce or eliminate liability in case of accidents that occur within the territory of the policy.

Latte Factor: The belief that by avoiding small daily purchases, such as a $5.00 latte or coffee, one will be able to save that money and either invest it or pay debt off with it and become much wealthier over time as a result. Go Be Rich feels that while this will save one money, the bigger financial decisions have the largest effect on wealth.

Neuroplasticity: A concept that refers to the brains ability to essentially re-wire itself in response to experience. It has long been believed that the brain, once fully formed after childhood, is static and does not change, but fairly modern research shows that the brain may be much, much more malleable and adaptable than previously thought.

Obamacare: A type of government-mandated healthcare introduced and spearheaded by the Obama Administration. Democrats typically endorse this plan, while Republicans generally do not.

Non-Discretionary Monthly Bills: Bills that expect you to pay a determined amount. Examples would be your car payment, mortgage, or cable bill. The opposite of these types of bills would be things like amount you spend on groceries or how much you spend on entertainment.

Private Mortgage Insurance: A type of insurance a homeowner will have to pay if purchasing a house without paying a 20% down payment. The sole purpose of this insurance is to protect the lender in case of you are not able to pay and you default on your loan. 

Property Tax: A type of tax imposed by municipalities that is based on the value of property that you own. The amount varies from location to location

Scarcity Method: A debt-reduction strategy that I invented. Regardless of which item of debt is being focused on, the point here is to throw all of your available cash at that one item until it's paid off, leaving you basically broke. This removes the temptation, not to mention ability, to spend your money on frivolous things or things that take you further away from your goal of paying off debt. For me this was a liberating strategy, because it's pretty hard to worry about money when you don't really have any. Then again, being single with no children, the only person I have to take care of is myself.

Snowball Method: A debt-reduction strategy in which debt is paid off in the order of smallest to largest principle, regardless of interest rates. The money being applied to a debt after it's paid off is then rolled over to help pay off the next item, and so on. This method's main draw is psychological, in that one is able to see progress being steadily made.

Stupid-Crazy Amount of Money Series A series here at Go Be Rich that is simply a fun, creative exploration of what could be done with unlimited cash. Ever wanted to buy Russia? How about the moon? Maybe you just want to buy every single dog in the world a pink stuffed chew-toy? Whatever you want to do, you can do it in the Stupid-Crazy Amount of Money series. Check out all the entries in the SCAM series here