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- 401(k)
- A US workplace retirement account funded with pre-tax income, often with an employer match. Taking money out early usually triggers penalties.See also: IRA, Tax-advantaged account
- Active investing
- Trying to beat the market through research, selection, and trading. Most active managers underperform after fees over long periods.See also: Passive investing, Expense ratio
- Asset
- Anything you own that has value — cash, investments, property, or a business. Assets can grow or shrink over time.See also: Liability, Net worth
- Asset allocation
- How your portfolio is split between asset classes like stocks, bonds, and cash. It drives most of your long-term risk and return.See also: Portfolio, Rebalancing
- Bear market
- A prolonged decline of 20% or more from recent highs. Bear markets are normal, painful, and historically temporary.See also: Bull market, Drawdown
- Bond
- A loan you make to a government or company. In return you receive interest payments and your principal back at maturity.See also: Interest, Principal
- Brokerage account
- A regular investment account with no tax advantages and no contribution limits. Flexible, but you owe taxes on dividends and gains.See also: Tax-advantaged account
- Budget
- A plan for where your money goes before it arrives. The best budget is the one you can actually keep.See also: Cash flow
- Bull market
- A long period of rising prices and optimism. Bull markets feel easy, which is exactly when risk gets underestimated.See also: Bear market
- Capital gain
- The profit from selling an investment for more than you paid. Many countries tax it, often at a lower rate for long-term holdings.See also: Capital gains tax, Real return
- Capital gains tax
- Tax owed on the profit when you sell an investment. Rates often depend on how long you held it and where you live.See also: Capital gain
- Cash flow
- The movement of money in and out of your life. Positive cash flow means you keep some of what you earn; negative means you're borrowing to get by.
- Compound interest
- Interest that earns interest. Returns are added to the balance, and future returns are calculated on the larger amount, so growth accelerates over time.See also: Interest, Rule of 72
- Correction
- A drop of 10% to 20% from recent highs. Corrections happen regularly — usually once every year or two.See also: Bear market
- Demat account
- An Indian account that holds shares and ETFs electronically, usually paired with a trading account to buy and sell them.See also: ETF, Share
- Diversification
- Spreading money across many investments so no single failure can ruin you. It's the closest thing to a free lunch in investing.See also: Index fund, Portfolio
- Dividend
- A share of profits a company pays to its shareholders, usually quarterly or annually. Dividends are often taxable when received.See also: Stock, Capital gains tax
- Dollar-cost averaging
- Investing a fixed amount on a regular schedule regardless of price, so you buy more when prices are low and less when high. SIPs are the Indian equivalent.See also: SIP, Volatility
- Drawdown
- The decline from an investment's peak to its lowest point. A 30% drawdown means it fell 30% before recovering.See also: Volatility, Bear market
- ELSS
- Equity Linked Savings Scheme: Indian mutual funds that offer tax deductions with a three-year lock-in and stock-market risk.See also: Mutual fund, Tax-advantaged account
- Emergency fund
- Cash set aside for genuine emergencies, usually three to six months of essential expenses, kept somewhere safe and accessible.See also: Liquidity, Cash flow
- ETF
- Exchange-traded fund: a fund that trades on a stock exchange like a share. Often an index fund, often cheap, easy to buy and sell during market hours.See also: Index fund, Liquidity
- Expense
- Money that flows away from you. Fixed expenses stay the same each month; variable expenses move around.See also: Cash flow, Budget
- Expense ratio
- The annual fee a fund charges, taken from the fund's assets. A 1% fee costs far more over decades than it sounds.See also: Index fund, Mutual fund
- FOMO
- Fear of missing out — buying because something is rising and others are profiting. FOMO is one of the most expensive emotions in finance.See also: Panic selling, Bull market
- Income
- Money that flows to you — salary, freelance payments, rent, dividends. It's measured over time, like per month or per year.See also: Cash flow
- Index
- A standardised list of securities representing a market or segment — like the S&P 500 or NIFTY 50 — used as a benchmark and as the basis for index funds.See also: Index fund
- Index fund
- A fund that tracks a market index mechanically, holding hundreds or thousands of securities at very low cost. No stock picking involved.See also: Index, ETF, Expense ratio
- Inflation
- The rate at which average prices rise. It reduces what each unit of money can buy, which is why idle cash loses value over time.See also: Purchasing power, Real return
- Interest
- The price of using money: what a borrower pays and a lender earns, usually expressed as an annual percentage rate.See also: Compound interest, Principal
- IRA
- Individual Retirement Account: a US tax-advantaged retirement account you open yourself, with annual contribution limits.See also: Roth IRA, 401(k)
- Liability
- Anything you owe — loans, credit card balances, unpaid bills. Liabilities subtract from your net worth.See also: Asset, Net worth
- Lifestyle creep
- Spending rising automatically with income, so raises never become savings. It's why a higher salary doesn't always mean more wealth.See also: Budget, Cash flow
- Liquidity
- How quickly and cheaply something can be turned into cash. Bank balances are highly liquid; property usually isn't.See also: Emergency fund
- Loss aversion
- The tendency to feel losses roughly twice as strongly as equivalent gains. It leads people to sell winners too early and hold losers too long.See also: Panic selling, Risk tolerance
- Market capitalisation
- A company's share price multiplied by its number of shares — the market's estimate of what the company is worth.See also: Stock
- Mutual fund
- A pooled investment that many people buy into, managed according to a stated strategy. It can be index-based or actively managed.See also: Index fund, Expense ratio
- Net worth
- Everything you own minus everything you owe. It's the clearest single measure of financial progress.See also: Asset, Liability
- Nominal
- The face-value number, before adjusting for inflation. A 6% nominal return with 5% inflation is only about 1% in real terms.See also: Real return, Inflation
- NPS
- National Pension System: an Indian retirement scheme where your contributions are invested in a mix of stocks and bonds you choose.See also: Tax-advantaged account
- Opportunity cost
- What you give up when you choose one option over another. Spending today has an opportunity cost of the future value that money could have earned.
- Panic selling
- Selling investments during a crash to stop the pain. It converts temporary paper losses into permanent ones and misses the recovery.See also: Loss aversion, Bear market
- Passive investing
- Buying broad market exposure and holding it, instead of trying to pick winning investments. Index funds are the main tool.See also: Index fund, Active investing
- Portfolio
- The complete collection of investments you hold. What matters is how the pieces work together, not each one alone.See also: Asset allocation, Diversification
- PPF
- Public Provident Fund: a long-term, government-backed savings scheme in India with tax benefits, very safe and very slow.See also: Tax-advantaged account, Inflation
- Principal
- The original amount you invested or borrowed, before any interest or returns.See also: Interest
- Purchasing power
- What a fixed amount of money can actually buy. Inflation steadily reduces purchasing power.See also: Inflation
- Real return
- Your return after subtracting inflation. It's the number that matters, because it reflects actual buying power gained or lost.See also: Nominal, Inflation
- Rebalancing
- Periodically selling winners and adding to laggards to return to your target allocation. Usually done once a year.See also: Asset allocation, Portfolio
- REIT
- Real Estate Investment Trust: a company that owns income-producing property and trades on an exchange, letting you own real estate in small slices.See also: Dividend, Diversification
- Return
- The gain or loss on an investment, usually shown as a percentage. Higher expected returns always come with more risk.See also: Risk, Real return
- Risk
- The chance that reality turns out worse than expected. In investing it covers volatility, permanent loss, and failing to reach your goal.See also: Volatility, Return
- Risk capacity
- How much loss your finances can actually absorb. You can feel brave and still lack the capacity to take the risk.See also: Risk tolerance, Time horizon
- Risk tolerance
- How much market drama you can emotionally endure without selling. It's about feelings, not math.See also: Risk capacity, Panic selling
- Roth IRA
- A US retirement account funded with after-tax money. Qualified withdrawals in retirement are tax-free, which suits people early in their careers.See also: IRA
- Rule of 72
- A shortcut: divide 72 by a growth or inflation rate to estimate how many years it takes for something to double. At 8%, money doubles in about 9 years.See also: Compound interest, Inflation
- SIP
- Systematic Investment Plan: a fixed amount invested automatically at regular intervals, commonly monthly into mutual funds in India.See also: Dollar-cost averaging, Mutual fund
- Stock
- A share of ownership in a company. Stocks can rise with the company's success, pay dividends, or lose most of their value.See also: Share, Dividend, Index fund
- Tax-advantaged account
- Any account that reduces taxes on your investments — like a 401(k), IRA, PPF, or ELSS — usually in exchange for limits or lock-ins.See also: 401(k), PPF, ELSS
- Time horizon
- How long until you need the money. Long horizons can tolerate more volatility; short horizons cannot.See also: Risk, Asset allocation