If someone asked you to explain them in simple terms, how would you define the following: 1. 401(k); 2. Annuity; 3. Dollar cost averaging; 4. Ex-date; 5. Gap Down; 6. Gap Up; 7. IRA; 8. Keogh plan; 9. Mortgage.

Just published, Rule Your Freakin’ Retirement, by master stock trader Michael Paness, provides 255 pages of good advice on retirement accounts and related topics. But the five-page glossary of terms at the end is worth copying, in case you’re ever asked to briefly define any of them.

Here are his definitions of the above terms:

401(k)
1. An employer-sponsored retirement plan that is basically a tax shelter. You invest your money (and it can be matched by your employer) before it has been subjected to income taxes.

Annuity
2. A right to receive amounts of money regularly, and usually in equal installments, over a period of time. Often over the remaining life or lives of one or more beneficiaries.
 
Dollar cost averaging
3. When you buy a stock and it declines in value, you buy more at a lower price to average the cost down.

Ex-date
4. The date a stock’s share price changes to reflect a stock split, and revised number of shares are credited to shareholders’ accounts.

Gap Down
5. A significate price move down from the previous day’s close.

Gap Up
6. A significant price move up from the previous day’s close.

IRA
7. Individual retirement account is a pension plan with tax advantages that permits individuals to invest through mutual funds, insurance companies, and banks, or directly in stocks and bonds.

Keogh plan
8. A tax-deferred personal retirement program that can be established by a self-employed individual or small business owner.

Mortgage
9. A loan that uses real estate as its collateral.

The book lives up to its subtitle: How to Retire Rich by Actively Managing Your Assets.