Glossary.

The process of spreading out a loan into a series of fixed payments over time. While the payment amount remains equal, the ratio of principal to interest changes each month.

Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon.

A capital gain is an increase in a capital asset's value and is considered to be realized when the asset is sold. It is the difference between the selling price and the original purchase price.

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods. Often called 'interest on interest'.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's overall financial performance and is used as an alternative to net income in some circumstances.

An expense ratio is the annual fee that all funds or ETFs charge their shareholders. It represents the percentage of a fund's assets used for administrative and other operating expenses.

A movement focused on extreme savings and investment to achieve financial independence and retire decades earlier than traditional budgets allow.

Liquidity refers to how easily and quickly an asset or security can be bought or sold in the market without affecting its price, or how easily it can be converted to cash.

Yield to maturity is the total return anticipated on a bond if the bond is held until it matures. It is considered a long-term bond yield but is expressed as an annual rate.