Investing Review Sheet
College Bound Institute TRIO Upward Bound South Dade
Prepared by The Investors Table
Investing
Using money or resources today with the goal of creating more value later.
Return
The gain or loss produced by an investment.
Interest
The cost of borrowing or the payment earned for allowing money to be used.
Compound interest
Growth earned on the original amount plus growth that was already earned.
Inflation
A broad rise in prices that reduces purchasing power.
Rule of 72
A shortcut for estimating doubling time: 72 divided by the annual return percentage.
Risk
The possibility that the result will differ from what you expect, including loss.
Risk profile
A description of the uncertainty and possible loss connected to an investment strategy.
Risk tolerance
The amount of uncertainty or possible loss a person can emotionally and financially handle.
Liquidity
How quickly an asset can become spendable cash without a major loss in value.
Diversification
Spreading money across different assets to reduce dependence on one outcome.
Opportunity
A situation where money, time, skill, or information could be used to create value.
Startup cost
One-time money needed to launch a business or investment project.
Initial investment
The first amount placed into an account, business, or asset.
Overhead
Ongoing costs required to keep a business or project operating.
Breakeven timeline
The time needed for cumulative income or savings to recover the original cost.
ROI
Return on investment, often calculated as profit divided by cost.
Active investing
Selecting and managing investments in an effort to outperform a benchmark.
Passive investing
Following a market or preset strategy with less frequent decision-making.
HYSA
A high-yield savings account that generally pays more interest than standard savings.
CD
A deposit held for a set term that usually pays a stated rate and may penalize early withdrawal.
401(k)
An employer retirement account that may include an employer match.
IRA
An individual retirement account opened outside an employer plan.
Stocks
Ownership interests in individual companies.
ETFs
Baskets of assets that trade on an exchange like stocks.
Educational use only.