📖 Reference

Financial glossary

Every term explained in one short paragraph — no jargon, no complexity for its own sake.

APR

The yearly cost of borrowing money, including interest and most fees, shown as a percentage.

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APY

The yearly return on savings when compounding is included.

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Compound Interest

Interest earned on both your original money and the interest it has already generated.

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Credit Score

A three-digit number lenders use to estimate how reliably you repay borrowed money.

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Diversification

Spreading your money across different investments to reduce the impact of any single failure.

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Dollar-Cost Averaging

Investing a fixed amount on a regular schedule regardless of what the market is doing.

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Emergency Fund

A cash cushion set aside for unexpected expenses like repairs, job loss or medical bills.

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ETF

A basket of many investments that trades on a stock exchange like a single share.

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Index Fund

A fund that tracks a market index, aiming to match its performance at low cost.

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Inflation

The gradual rise in prices that reduces what each dollar can buy over time.

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Interest

The cost of borrowing money, or the reward for lending or saving it.

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Liquidity

How quickly and easily you can turn an asset into cash without losing value.

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Market Capitalization

The total dollar value of a company's shares — its price multiplied by shares outstanding.

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Net Worth

Everything you own minus everything you owe.

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Principal

The original amount of money borrowed or invested, before any interest.

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Bond

A loan you give to a government or company in exchange for regular interest payments.

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