Saving:
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Savings Account: A bank account that allows individuals to deposit money, earn interest, and make withdrawals.
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Emergency Fund: A reserve of money set aside to cover unexpected expenses or financial emergencies.
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Fixed Deposit (CD): A time deposit with a fixed term and interest rate, often providing higher interest than regular savings accounts.
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Compound Interest: Interest calculated on the initial principal as well as the accumulated interest from previous periods.
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Liquid Assets: Assets that can be quickly converted into cash, such as money in a savings account.
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Budgeting: The process of planning and allocating funds for specific purposes, including saving.
Investing:
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Investment: The allocation of money with the expectation of generating income or profit over time.
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Stocks: Ownership shares in a company that represent a claim on part of the company's assets and earnings.
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Bonds: Debt securities where investors lend money to an entity (government or corporation) in exchange for periodic interest payments and the return of the principal.
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Mutual Funds: Investment vehicles that pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities.
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Diversification: Spreading investments across different asset classes to reduce risk.
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Risk Tolerance: An investor's ability to endure fluctuations in the value of their investments without panicking.
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Return on Investment (ROI): The gain or loss generated on an investment relative to the amount invested.
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Capital Gains: Profits from the sale of an investment, such as stocks or real estate.
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Dividends: Payments made by a corporation to its shareholders, typically as a distribution of profits.
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Risk-Return Tradeoff: The principle that potential return rises with an increase in risk.
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Portfolio: A collection of investments owned by an individual or institution.
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Asset Allocation: The distribution of investments across different asset classes to achieve a specific risk and return profile.
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Real Estate: Investment in physical properties, such as residential or commercial real estate.
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ETF (Exchange-Traded Fund): A type of investment fund and exchange-traded product, with shares that trade on stock exchanges.
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Liquidity: The ease with which an investment can be quickly bought or sold without affecting its price.