BASIC INVESTING
What is investing?
when you put money into something hoping it grows over time.
What are low-risk investments?
These investments are usually safer but grow slowly.
What is a bank?
A place where people safely store and manage their money.
What is simple interest?
Interest calculated only on the original amount invested.
What is a TFSA (Tax-Free Savings Account)?
A Canadian account where investment growth is tax-free.
What are stocks?
This type of investment represents ownership in a company.
What is risk?
This is the chance you might lose money on an investment.
What is a deposit?
Money you put into a bank account to keep safe or use later.
What is compound interest?
Interest earned on both the original money and previous interest.
What is an RRSP?
A retirement account where contributions are tax-deductible.
What is profit or return?
this is money earned from an investment over time.
What are high-risk investments?
These investments can make more money but are more likely to lose value.
What is a withdrawal?
Money you take out of your bank account.
What is real return?
This shows how inflation affects the real value of returns.
What is capital gains tax?
This is a tax charged on profits when you sell an investment for more than you paid.
What is diversification?
This is when you spread money across different investments to reduce risk.
What is risk vs reward?
This idea means higher risk usually comes with higher potential reward.
What is a chequing account?
A bank account that lets you easily access your money but usually earns little interest.
What is exponential growth?
This is the formula used to calculate growth over time with compounding.
What is negative real growth?
This happens when inflation is higher than your investment returns.
What is inflation?
This term means prices are rising and money buys less over time.
What is a market downturn (or crash)?
This is when an investment loses value quickly due to market changes.
What is a savings account?
A bank account that is meant for saving money and usually earns more interest.
What is opportunity cost?
This concept means money loses value if it is not invested or growing.
What is long-term investing?
This strategy means investing based on long-term goals rather than short-term market changes.