(Prosperity)

Define: Security

Security is used a lot in financial reporting but it does not necessarily always resonate with its familiar meanings. When you think of the word “security,” two mental images come to mind– the guy at the museum entrance in the ill-fitting uniform and that sense of well-being that you get when you‘re cuddled up with Ben and Jerry.

In finance, a security is an asset with a specific value that can be traded or sold in whole or part. The financial term derives from the definition of ‘security ‘as something, to quote Webster, “given or pledged to make certain the fulfillment of an obligation, or showing ownership.”

There are three main types of financial securities or assets:

1. Cash or cash equivalents. – These are liquid assets, or those you have in hand, or readily available for buying goods or services.
2. Equities   (Stocks).
3. Fixed Income Instruments – Notes or  Bonds.

If you manage your financial securities well by including them in a diverse, and well balanced portfolio, it will lead to that other type of security, the overall sense of well-being that comes with a flannel blanket and Phish Food or Chubby Hubby ice cream.  If you’re looking to end up with the guy from the museum, well, we’ve got other things to talk about.

Also On Prosperity

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• Your Financial Personality

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Extra Credit - This usage of security was cemented into the modern vernacular with the enactment of the Federal Securities Act of 1933 following the stock market crash of 1929 and The Great Depression. During this time, its usage was greatly expanded to cover all sorts of stocks, notes, bonds and other financial interests that can be traded.

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