The words you'll run into
Not secondaries or venture-capital jargon — the foundational terms that come up before your first investment. Each one explains what it means and why it actually matters, not just a dictionary definition.
All terms
Emergency fund
Cash set aside — separate from your investments — to cover three to six months of essentia…
Index fund
A fund that holds all (or a representative sample) of the companies in a market index — li…
Compound interest
Interest (or investment growth) that earns interest on itself over time, not just on your …
Diversification
Spreading money across different assets, sectors and geographies so that no single bad out…
Risk tolerance
How much loss you can withstand — financially and emotionally — without abandoning your pl…
Accredited investor
A legal status, based on income, net worth, or professional credentials, required to buy c…
Dollar-cost averaging
Investing a fixed amount on a regular schedule — say, monthly — instead of trying to time …
Net worth
Everything you own (cash, investments, property) minus everything you owe (debt, loans, cr…
Expense ratio
The annual fee a fund charges, shown as a percentage of your investment — for example, 0.0…
Affinity fraud
Investment fraud that exploits trust within a shared community — a church, a family WhatsA…