What is Socking away Money
Setting aside money for later
What is SAVING
A collection of financial investments
What is a Portfolio
The uncertainty of an investments outcome
What is Risk?
Spreading Investments across Various Assets so that if one goes down, another might go up and balance things out.
What is Diversification?
Investments lasting less than 12 months
What are Short-Term Investments
Using money to make more Money
What is Investing
Stocks, Bonds, Businesses, Precious Metals, Crypto Currencies, and other Assets
What are Investment Types
Potential for adverse effects on earnings or capital caused by unexpected fluctuations in market interest rates
What is Interest Rate Risks
Investing in different types of Assets
What is Asset Diversification
Investments lasting longer than 12 months
What are long term investments
3-6 months of living expenses
What is an Emergency Fund
Loans to an entity like a city
What are Bonds
Even if your investment shows a positive return, that return might be smaller than the inflation rate, resulting in a negative real return.
What is Inflationary Risk
Investing across various global markets
What is Geographical Diversification
You sell your long-term investment for more than what you paid for the investment
What is a long-term capital gain
Interest that is earned on top of previous interest earned.
What is Compound Interest
Loans to a bank
What are Certificate of Deposits
The potential for a business or institution to be unable to meet its short-term financial obligations because it lacks sufficient cash or easily convertible assets.
What is Liquidity Risk
Spreading Investments Across Different Industries
What is Industry Diversification?
You sell your short-term investment for less than what you paid for it
What is a short-term capital loss