Course glossary
The concepts, in context.
- Cash flow: timing matters
- A positive monthly budget can still contain a week when cash runs short.
- Emergency reserves and liquidity
- A reserve is money set aside for an unexpected expense; access is part of its purpose.
- Goals and time horizon
- A goal needs an amount, a date, and a way to handle uncertainty.
- Simple interest
- Simple interest applies the rate to the original principal, without interest on prior interest.
- Compound interest
- Compound interest adds earlier interest to the base that earns the next period’s interest.
- Inflation and purchasing power
- A larger number of dollars does not always buy more goods and services.
- Diversification and concentration
- Different labels do not necessarily mean different underlying risks.
- Fees and long-term growth
- A recurring fee reduces both today’s balance and the amount left to grow.
- Account security and monitoring
- Prevention and prompt detection work together.
- Phishing and impersonation
- Verify the sender through a channel you already trust.