If at any point in the guide you came across a word or phrase that wasn't defined here, be sure to click here to help update the guide!
| Term | Definition |
|---|---|
Net Worth | "Net worth is the value the assets a person or corporation owns, minus the liabilities they owe." [1] |
Asset | "An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit." [1] |
Liability | "A liability is something a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services." [1] |
APR | Annual Percentage Rate (APR) "refers to the annual rate of interest charged to borrowers and paid to investors." [1] |
Debt | Debt is "n amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not afford under normal circumstances" [1]. |
IRA | "An individual retirement account (IRA) is a type of tax-deferred or tax-free retirement savings account that many financial institutions offer" [1]. |
Interest | Interest is "the charge for the privilege of borrowing money, typically expressed as annual percentage rate (APR). Interest can also refer to the amount of ownership a stockholder has in a company, usually expressed as a percentage" [1]. |
APR | "The annual percentage yield (APY) is the real rate of return earned on a savings deposit or investment taking into account the effect of compounding interest" [1]. |
ETF | An exchange traded fund is "a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies" [1]. |
Passive Income | Passive income is "income that requires little to no effort to earn and maintain" [1] |
Inflation | "Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over some period of time" [1]. |
The Automatic Millionaire