Explore the world's markets.
Live prices are end-of-day delayed and shown for education, not investment advice.
Asset
Something you own that has value.
An asset is anything of value you own — cash, stocks, bonds, a home, a business. Assets can generate income (rent, dividends), grow in value, or simply hold value.
Liability
Something you owe.
A liability is money you owe someone else — credit card balances, loans, a mortgage. Subtract liabilities from assets to get your net worth.
Net Worth
Assets minus liabilities.
A snapshot of your financial position: everything you own, minus everything you owe. Track it monthly to see the impact of saving, paying down debt, and investing.
Principal
The original amount of money.
In a loan, principal is the amount you borrowed (before interest). In an investment, it's the amount you originally put in, before any growth.
Interest Rate
The price of borrowing money, shown as a %.
The percentage a lender charges a borrower for the use of their money each year. When you save, you earn interest; when you borrow, you pay it.
APR
Yearly cost of borrowing, as a %.
Annual Percentage Rate. It includes the interest rate plus some fees, expressed as a yearly percentage. A lower APR means cheaper borrowing.
APY
Yearly return on savings, compounded.
Annual Percentage Yield. It shows how much a savings account or CD actually earns in a year once compounding is included.
Compound Interest
Interest earned on interest.
When your earnings are reinvested, future interest is calculated on a bigger balance than you started with — so growth speeds up over time instead of staying flat.
Inflation
Prices rising over time.
A general increase in prices across the economy. Because of inflation, a dollar today usually buys a little less next year, which is why it's worth investing money instead of only holding cash.
Credit Score
A number that summarizes how reliably you repay debt.
A number (commonly 300–850) that predicts how likely you are to repay borrowed money on time, based on your credit history. A higher score usually means better loan terms.
Portfolio
All the investments you own, as a group.
Your portfolio is the full collection of things you've invested in — stocks, bonds, funds, and more — looked at together rather than one at a time.
Stock
A small piece of ownership in a company.
Buying a stock (also called a share or equity) makes you a partial owner of that company. If the company does well, your stock can rise in value and may pay you a dividend.
Equity
Ownership — another word for stock.
Equity means ownership. 'Equities' is another word for stocks. Owning equity in a company means you own a slice of it, rather than having lent it money.
Bond
A loan you make to a borrower.
When you buy a bond, you are lending money to a government or company. In return, they pay you interest on a schedule and return your principal when the bond matures — unless the borrower fails to pay (defaults).
Dividend
Cash a company pays its shareholders.
A portion of a company's profit paid out to people who own its stock, usually every quarter. Not all companies pay dividends — some reinvest profits into growth instead.
Risk
The chance an investment loses value.
Risk is the possibility that an investment's value goes down, or that you lose money. Generally, investments with higher potential reward also carry higher risk.
Risk Tolerance
How much loss you can handle, financially and emotionally.
Your personal comfort level with an investment losing value in the short term, in exchange for the chance of higher long-term growth. Risk tolerance is often higher when you have more time before you need the money.
Diversification
Spreading your money across many investments.
Owning many different assets — instead of just one or two — so that if one investment performs badly, it doesn't sink your whole portfolio.
Volatility
How much a price bounces around.
A measure of how much an investment's price swings up and down over time. Higher volatility means bigger, faster price moves — both gains and losses.
Liquidity
How quickly you can turn something into cash.
How fast an asset can be sold and converted into spendable cash without losing value. Cash itself is perfectly liquid; a house is not, because selling it takes time.
Market Capitalization
The total value of a company's stock.
Often shortened to 'market cap.' It's a company's share price multiplied by the total number of shares it has issued — a rough measure of the company's total size in the stock market.
Mutual Fund
A pooled basket of investments run by a manager.
A fund that pools money from many investors to buy a mix of stocks, bonds, or other assets. You buy shares of the fund, which trade once per day after markets close.
ETF
Exchange-Traded Fund — a basket of investments you can trade like a stock.
A fund that holds a basket of stocks, bonds, or other assets, but — unlike a mutual fund — trades on an exchange all day long, just like an individual stock. Often low-cost.
Index
A list that tracks a group of investments together.
A benchmark that measures the performance of a specific group of investments as a whole — for example, the S&P 500 tracks about 500 large U.S. companies. Indexes let investors compare 'the market' rather than one stock.
Index Fund
A fund built to match a market index.
A mutual fund or ETF designed to mirror a specific index (like the S&P 500) rather than trying to beat it. Usually low-cost and broadly diversified.
Expense Ratio
The yearly fee a fund charges you.
The percentage of your investment a fund charges each year to cover its costs. A 0.50% expense ratio on $10,000 costs you $50 a year — lower is better, all else equal.
Asset Allocation
How your money is split among stocks, bonds, and cash.
The mix of different asset types (stocks, bonds, cash, and others) that make up your portfolio. Your ideal allocation usually shifts to be more conservative as you get closer to needing the money.
Capital Gain
Profit from selling an investment for more than you paid.
The profit you make when you sell an investment for more than you originally paid for it. If you sell for less, that's a capital loss instead.
Yield
The income an investment pays you, as a % of its price.
The income (like interest or dividends) an investment pays out each year, shown as a percentage of what you paid for it. A bond yielding 4% pays you about $4 a year for every $100 invested.
REIT
A fund that invests in real estate.
Real Estate Investment Trust — a company that owns income-producing property (like apartment buildings or malls) and is required to pay most of its profit out as dividends. Lets you invest in real estate without buying a building yourself.
Commodity
A raw material traded on markets.
A basic raw material or agricultural product — like gold, oil, or wheat — that is bought and sold on markets. Prices are set globally by supply and demand.
P/E Ratio
Price divided by earnings.
Price-to-Earnings ratio: how many dollars investors are paying for one dollar of a company's yearly profit. A useful way to compare companies within the same industry.
Bull / Bear Market
Rising / falling markets.
A bull market is a period when prices are broadly rising (often defined as +20% from a recent low). A bear market is a period when prices are broadly falling (often −20% from a recent high).
GDP
Total value of goods and services a country produces.
Gross Domestic Product — a broad measure of everything a country's economy produces in a year. It's one of the main ways economists judge whether an economy is growing or shrinking.
Emergency Fund
Cash set aside for surprises.
Money — usually 3 to 6 months of essential expenses — kept in an easy-to-reach account to cover surprises like job loss, car repairs, or medical bills without going into debt.
Roth IRA
A retirement account with tax-free growth.
A retirement account you fund with money you've already paid taxes on. In exchange, qualifying withdrawals in retirement — including all the growth — are completely tax-free.
401(k)
A workplace retirement savings plan.
A retirement account offered through your employer. Many employers add a 'match' — extra free money added when you contribute — so it's usually worth contributing at least enough to get the full match.
FICA
The payroll tax for Social Security and Medicare.
FICA is the chunk taken out of every paycheck that funds Social Security and Medicare. It's about 7.65% of your pay, and your employer pays the same amount again on your behalf.
Gross Pay
What you earned before anything is taken out.
The full amount you earned in a pay period, before taxes, insurance, and retirement contributions are subtracted.
Net Pay
What actually lands in your bank account.
Also called take-home pay: your gross pay minus taxes and other deductions. This is the number your budget should be built on.
Withholding
Money your employer sends to the government for you.
The tax your employer holds back from each paycheck and sends to the IRS and your state on your behalf, so you don't owe it all at once in April.
W-2
The tax form an employer gives you.
A form your employer sends each January showing what you earned and what was already withheld in taxes. You use it to file your tax return.
1099
The tax form for freelance or contract work.
A form reporting money you were paid as a contractor rather than an employee. No taxes were withheld, so you're responsible for paying them yourself.
Tax Bracket
A slice of income taxed at one rate.
Income is split into bands, and each band is taxed at its own rate. Only the dollars inside a higher band get the higher rate — a raise never re-taxes your whole income.
Standard Deduction
Income the government doesn't tax.
A flat amount subtracted from your income before tax is calculated, so the first chunk of what you earn is tax-free.
Tax Credit
A dollar-for-dollar cut in the tax you owe.
A credit subtracts directly from your tax bill. A $500 credit saves you $500 — stronger than a deduction, which only lowers the income being taxed.
Premium
What you pay each month for insurance.
The regular payment that keeps an insurance policy active, whether or not you ever make a claim.
Deductible
What you pay before insurance starts paying.
The amount you cover out of pocket first. With a $1,000 deductible, you pay the first $1,000 of a covered bill and insurance handles the rest per your plan.
Copay
A flat fee for a visit or prescription.
A fixed amount — say $25 for a doctor's visit — you pay at the time of service, separate from your deductible.
Out-of-Pocket Maximum
The most you can pay in a year.
The yearly ceiling on your own spending for covered care. Once you hit it, your insurer pays 100% of covered costs for the rest of the year.
Credit Utilization
How much of your credit limit you're using.
Your balance divided by your credit limit. Keeping it under about 30% generally helps your credit score; lower is better.
Credit Limit
The most a card lets you borrow.
The ceiling on what you can charge to a credit card. Going over it can trigger fees or a declined transaction.
Minimum Payment
The smallest payment that keeps you current.
The least you can pay on a card each month without a late fee. Paying only the minimum stretches the debt out for years and multiplies the interest.
Collateral
Something the lender can take if you don't pay.
An asset — like a car or a house — pledged to back a loan. Secured loans have collateral and lower rates; unsecured loans don't and cost more.
Cosigner
Someone who promises to pay if you can't.
A person who signs a loan with you and is legally on the hook for the full balance if you miss payments. It affects their credit too.
Payday Loan
A tiny short-term loan with a huge rate.
A small loan due on your next payday, often carrying an effective APR in the hundreds of percent. Rolling one over repeatedly is how borrowers get trapped.
Overdraft Fee
A charge for spending more than you have.
A fee — often around $35 — a bank charges when a purchase pushes your checking account below zero and the bank covers it anyway.
Direct Deposit
Your pay sent straight to your bank.
An electronic transfer of your paycheck into your account on payday, with no paper check to cash.
Certificate of Deposit
Savings locked up for a set time at a set rate.
A CD pays a fixed rate if you leave the money untouched for a set term. Withdraw early and you usually forfeit some interest.
Down Payment
The cash you put in up front.
The portion of a home's price you pay yourself instead of borrowing. A bigger down payment means a smaller loan and lower monthly payments.
Escrow
An account that holds money for taxes and insurance.
A holding account your lender uses to collect part of your property tax and homeowners insurance with each mortgage payment, then pays those bills for you.
PMI
Extra insurance you pay when your down payment is small.
Private Mortgage Insurance protects the lender, not you. It's usually required with less than 20% down and can be dropped once you build enough equity.
Amortization
How a loan gets paid off over time.
The schedule that splits each payment between interest and principal. Early payments are mostly interest; later ones are mostly principal.
Employer Match
Free retirement money from your job.
Money your employer adds to your retirement account when you contribute — for example 50 cents per dollar up to 6% of your pay. Not contributing enough to get it leaves guaranteed money behind.
Vesting
When employer contributions become truly yours.
A waiting period before the money your employer put into your retirement account belongs to you. Leave too early and you may forfeit part of it.
HSA
A tax-free savings account for medical costs.
Health Savings Account. Paired with a high-deductible health plan, it lets you set aside money tax-free for medical expenses, and unused money rolls over year to year.
Opportunity Cost
What you give up by choosing one thing.
The value of the next-best option you passed on. Spending $200 today costs you not just the $200 but whatever that money could have grown into.
Cash Flow
Money in versus money out.
The movement of money through your month. Positive cash flow means you brought in more than you spent; negative means the gap is filled by savings or debt.
Debt-to-Income Ratio
Debt payments as a share of your income.
Your monthly debt payments divided by your monthly gross income. Lenders use it to judge whether you can afford another loan; under about 36% is typically considered healthy.
Lifestyle Inflation
Spending more just because you earn more.
The habit of raising your spending every time your income rises, so a raise never actually improves your savings.
Loss Aversion
Losses hurt more than equal gains feel good.
A mental bias where losing $100 stings roughly twice as much as gaining $100 feels good — which pushes people to sell investments at the worst moment.
ROI
What you got back compared to what you put in.
Return on Investment: the gain from something divided by its cost. Useful for comparing very different choices, from a degree to a used car.