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 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.
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.
Diversification in real estate is the strategy of spreading investment capital across various assets, markets, or property types to reduce risk and enhance portfolio stability against market fluctuations.
A payment made by a company or investment fund to its shareholders, typically from its profits, representing a share of earnings. For real estate investors, this often comes from Real Estate Investment Trusts (REITs).
Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. It's a key metric for income-focused investors to understand the return on their investment from dividends.
A readily accessible pool of money set aside to cover unexpected financial challenges, crucial for both personal and real estate investment stability.
Equity in real estate is the portion of a property's value that an owner truly owns, free and clear of any outstanding debts or liens. It is calculated as the property's current market value minus the total amount owed on any mortgages or loans.
An Exchange-Traded Fund (ETF) is an investment fund that holds a diversified basket of assets like stocks or bonds and trades on stock exchanges throughout the day, offering flexibility and often lower costs.
Financial discipline is the practice of managing your money responsibly and consistently adhering to a financial plan to achieve your investment and personal financial goals.
Financial education is the process of learning how to understand and effectively manage personal finance concepts like budgeting, saving, investing, and debt to make informed financial decisions.
Financial freedom is the state where your passive income consistently covers all your living expenses, allowing you to live without needing a traditional job.
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