- Asset
- Anything you own that has economic value — cash, stocks, a house, a business.
- Bond
- A loan you make (often to a government or company) that pays you interest, then returns your principal.
- Compounding
- Earning returns on your past returns. The reason starting early matters more than starting big.
- Dividend
- A share of a company's profits paid directly to shareholders, usually quarterly.
- Diversification
- Owning many different assets so no single failure can ruin you.
- ETF
- Exchange-Traded Fund. A basket of assets (often an index) that trades like a single stock.
- Equity
- Ownership. In a company, it means shares. In a house, it means the part you actually own vs. owe.
- Fed (Federal Reserve)
- The U.S. central bank. Sets interest-rate policy and tries to keep prices and employment stable.
- GDP
- Gross Domestic Product. The total value of everything a country produces in a year.
- Inflation
- A general rise in prices over time. Each dollar buys a little less than it did before.
- Index
- A weighted basket of stocks used to measure a market (e.g. S&P 500, FTSE 100, Nikkei 225).
- Interest rate
- The price of borrowing money. Higher rates cool the economy; lower rates warm it.
- Liability
- Anything you owe — a loan, a mortgage, a credit card balance.
- Liquidity
- How quickly an asset can become spendable cash without losing much value.
- Net worth
- Everything you own minus everything you owe. A scoreboard, not a self-worth measure.
- Portfolio
- The full collection of investments you own.
- Recession
- A meaningful, sustained decline in economic activity. Officially, two quarters of negative GDP growth.
- Risk
- The chance an investment loses value. More risk usually buys higher long-term returns — and steeper short-term drops.
- Share
- A single unit of ownership in a company.
- Stock
- Used interchangeably with share. The equity of a company, sliced up.
- Volatility
- How much an asset's price swings around. High volatility = a bumpy ride, not necessarily a bad one.
- Yield
- The income an investment produces, expressed as a percentage of its price.