Personal Finance Vocabulary - Risk, Saving, and Investing

Vocabulary-style flashcards covering key terms from the video notes (risk, saving, investing, and basic investment concepts).

Market risk

The risk that an investment's value will decrease due to changes in the overall market.

Emergency fund

A financial goal that involves setting money aside for unforeseen expenses or emergencies.

Diversification

Spreading investments across various assets to reduce risk.

Investing

The process of putting money into financial schemes, shares, property, or commercial ventures with the expectation of achieving a profit.

Savings

The portion of income not spent on current consumption but is set aside for future use.

Savings account

A financial product in which money is placed to earn interest over time, usually with low risk.

Investment

An asset purchased with the intention of generating income or appreciating in value over time.

Interest / Rate of Return

The return earned on an investment, usually expressed as a percentage of the original amount invested.

Mutual fund

A type of investment where funds from many investors are pooled together and managed by professionals to invest in stocks, bonds, or other assets.

Bond

A fixed-income investment where an investor loans money to a corporation or government for a defined period at a fixed interest rate.

Compound interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods.

Stock market

A place or system where buyers and sellers exchange financial securities like stocks and bonds.

Principal

The original amount of money invested or saved, before any interest or returns.

Capital gain

The increase in value of an investment over time.

Stock or Share

A type of investment that represents ownership in a company and entitles the holder to a share of its profits.