Basic investment concepts, portfolio theory, asset allocation, stocks, bonds, mutual funds, and ETFs.
Master investment fundamentals with our progressive approach
Foundation terms you need to know first (65 terms)
A lump sum investment in real estate involves committing a single, large amount of capital upfront to acquire a property or fund a project, rather than making smaller, periodic contributions. It's a direct approach often used for full property purchases or significant down payments.
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.
The fundamental resources—land, labor, capital, and entrepreneurship—used to produce goods and services, including real estate, and are crucial for understanding economic activity and investment potential.
Complex strategies and professional concepts (5 terms)
A Personal Financial Stress Test is a systematic evaluation of an individual's or household's financial resilience against adverse economic scenarios, crucial for real estate investors to safeguard their portfolios.
Indexed Universal Life (IUL) is a type of permanent life insurance that offers a death benefit and a cash value component, where the cash value growth is linked to the performance of a market index, such as the S&P 500, typically with a floor and a cap on returns.
The Sharpe Ratio is a measure of risk-adjusted return, indicating the average return earned in excess of the risk-free rate per unit of total risk (volatility or standard deviation). It helps investors understand the return of an investment compared to its risk.
The Securities and Exchange Commission (SEC) is an independent agency of the U.S. federal government responsible for protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation. It regulates publicly traded securities, including those related to real estate.
Modern Portfolio Theory (MPT) is an investment framework that aims to maximize portfolio expected return for a given level of market risk, or equivalently, minimize risk for a given level of expected return, through diversification.
A financial profile is a comprehensive summary of an individual's or entity's financial health, encompassing income, expenses, assets, liabilities, and credit history, crucial for assessing creditworthiness and investment capacity.
Financial readiness is the state of having your personal finances in order, including stable income, manageable debt, a strong credit score, and sufficient savings, to confidently undertake real estate investments.
A first-time homebuyer is an individual who has not owned a primary residence in the last three years, making them eligible for special loan programs and financial assistance designed to facilitate homeownership.
Focus Blocks are dedicated, uninterrupted periods of time, typically 60-90 minutes, set aside for deep, single-task work on high-priority real estate investment activities to maximize concentration and output.
The Future Value Factor (FVF) is a multiplier used to calculate the future value of a single lump sum investment, assuming a specific interest rate and compounding period.
Goal setting in real estate investing is the process of defining clear, measurable, and achievable targets for your investment activities, providing direction and a roadmap for success.
Government securities are debt instruments issued by a national government to finance its spending, representing a low-risk investment for lenders and serving as a benchmark for other interest rates in the economy.
A High-Net-Worth Individual (HNWI) is a person or a household with a significant amount of liquid financial assets, typically defined as having at least $1 million in investable assets, excluding their primary residence.
A type of savings account that offers significantly higher interest rates than traditional savings accounts, typically provided by online banks and FDIC-insured.
An IRA rollover is the process of moving funds from one retirement account to another, typically from an employer-sponsored plan to an Individual Retirement Account (IRA), without incurring immediate taxes or penalties.
Imposter syndrome in real estate investing is the persistent feeling that one's success is undeserved or achieved through luck, despite clear evidence of competence and achievement, leading to self-doubt and fear of being exposed as a 'fraud'.
Indexed Universal Life (IUL) is a type of permanent life insurance that offers a death benefit and a cash value component, where the cash value growth is linked to the performance of a market index, such as the S&P 500, typically with a floor and a cap on returns.
Explore complementary areas that build on investment fundamentals concepts
Personal budgeting, expense tracking, cash flow management, emergency funds, and savings strategies.
Credit scores, debt consolidation, loan management, credit repair, and debt payoff strategies.
Macroeconomic concepts, interest rates, inflation, Federal Reserve policy, and economic cycles.
Wills, trusts, estate taxes, succession planning, beneficiary planning, and wealth preservation.