Intermediate terms

Essential Inflation Basics Terms

This curated collection includes key terms that might be helpful when exploring inflation basics. It covers core concepts, key metrics, and how central bank actions influence the economy. These terms were selected based on common questions and areas where investors often need clarity.

Learning Path

Nominal Return

Nominal return is the unadjusted percentage gain or loss on an investment, reflecting the raw monetary change before accounting for inflation, taxes, or fees.

Intermediate13-14 min

Rent Escalation Clause

A rent escalation clause is a lease provision that mandates periodic increases in the base rent over the term of the lease, typically to account for inflation or rising operating costs.

Intermediate13-14 min

Net Operating Income

Net Operating Income (NOI) is a key real estate metric representing a property's annual income after deducting all operating expenses, but before accounting for debt service, income taxes, and capital expenditures.

Intermediate11-12 min

Capitalization Rate

The Capitalization Rate (Cap Rate) is a real estate valuation metric used to estimate the potential rate of return on an investment property, calculated by dividing its Net Operating Income (NOI) by its current market value.

Intermediate14-15 min

Adjustable-Rate Mortgage

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.

Beginner14-15 min

Inflation Hedge

An inflation hedge is an investment, such as real estate, that is expected to retain or increase its value and purchasing power during periods of rising inflation, protecting wealth from currency devaluation.

Intermediate13-14 min

Real Return

Real return measures the actual purchasing power gain of an investment after accounting for inflation, providing a more accurate assessment of an investor's wealth growth.

Intermediate14-15 min