Basic investment concepts, portfolio theory, asset allocation, stocks, bonds, mutual funds, and ETFs.
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Foundation terms you need to know first (44 terms)
Real assets are physical, tangible investments such as real estate, commodities, and infrastructure, valued for their intrinsic properties and often used as an inflation hedge and portfolio diversifier.
Liabilities are financial obligations or debts that an individual or business owes to others, representing money that must be paid back in the future.
The percentage of your disposable income that you save rather than spend, a key metric for personal finance and crucial for building capital for real estate investments.
An Investment Club is a group of individuals who combine their funds and expertise to collectively invest in assets, often real estate, sharing both the risks and rewards.
The amount of money an individual or household has left to spend or save after paying income taxes. It's a key indicator of financial health and purchasing power.
Complex strategies and professional concepts (1 terms)
A 401(k) plan is an employer-sponsored retirement savings account that allows employees to contribute a portion of their salary on a tax-advantaged basis, often with employer matching contributions, to invest for their future.
A 401(k) withdrawal is the act of taking funds from a 401(k) retirement account, often incurring ordinary income taxes and a 10% early withdrawal penalty if done before age 59½ without qualifying for an exception.
Actionable steps are small, specific, and measurable tasks that break down a larger real estate investment goal into manageable parts, making it easier to plan and execute your strategy.
An Adjustable-Rate Mortgage (ARM) is a home loan where the interest rate can change periodically based on an index, leading to fluctuating monthly payments after an initial fixed-rate period.
Asset allocation is an investment strategy that distributes capital across different asset classes, property types, and investment vehicles to manage risk and optimize returns according to an investor's financial goals and risk tolerance.
Automated savings is a financial strategy that involves regularly transferring a set amount of money from one account to another without manual intervention, helping investors consistently build capital for real estate goals.
A balance sheet is a financial statement that provides a snapshot of a company's or individual's financial health at a specific point in time, detailing assets, liabilities, and owner's equity.
A beginner investor is an individual new to real estate investing, typically with limited experience, focused on learning fundamental concepts and starting with lower-risk strategies.
The bond market is a financial market where debt securities are issued and traded, influencing interest rates, mortgage costs, and property valuations for real estate investors.
Business credit is a credit profile established for a business entity, separate from its owner's personal credit, used to secure financing and establish credibility for commercial activities.
A cash reserve is a dedicated fund for real estate investors to cover unexpected property expenses, vacancies, and major repairs, ensuring financial stability and protecting investment cash flow.
Compounding interest is the process where an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time, leading to exponential growth.
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