Investing
Investing is buying assets, stocks, bonds, ETFs, real estate, that produce returns over time, either through growth in value or income (dividends, interest, rent). It accepts short-term volatility in exchange for long-term growth that beats inflation. The longer the time horizon, the more sense it makes; the shorter the horizon, the riskier it gets.
Buying $200 of a global stock ETF every month for thirty years, ignoring the swings, is a textbook example of long-term investing.
Money in motion
Compound interest
Interest paid not just on what you put in, but on the interest you have already earned.
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The rate at which the general price of things rises. Same money, less purchasing power.
Read →Interest rate
The percentage something pays, or costs, per year.
Read →Return
The gain (or loss) on an investment, usually expressed as a percentage per year.
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