Money / First Principles
How money works, how choices accumulate, and how to begin participating in financial life.
Broke
Broke is an informal word for having little or no money available, especially for current expenses. It does not identify one fixed financial condition.
Budgeting
Budgeting is planning how available money will cover spending, saving and other commitments over a period.
Cash Flow
Cash flow is the movement of money into and out of a person, business or other entity over a period.
Compound Interest
Compound interest is interest calculated on an amount that includes previously accumulated interest, as well as the original principal.
Credit Score
A credit score is a numerical estimate of credit risk, calculated from information such as a person's borrowing and repayment history.
Debt
Debt is an obligation to repay borrowed money or another amount owed, according to agreed or legally imposed terms.
Emergency Fund
An emergency fund is money reserved for unplanned expenses or a disruption to income, with access available when it is needed.
Financial Freedom
Financial freedom is an informal description of having enough financial capacity to make desired life choices without money being the dominant constraint.
Inflation
Inflation is a rise in the general level of prices over time, reducing what a unit of money can buy.
Investing
Investing means committing money to assets or activities with the expectation of future income or gain, while accepting the possibility of loss.
Lifestyle Inflation
Lifestyle inflation is an increase in spending as income rises, reducing how much of the extra income becomes savings or financial flexibility.
Money
Money is something widely accepted for payments, used to express prices and debts, and held to carry purchasing power into the future.
Net Worth
Net worth is the value of what a person or organization owns minus what it owes at a given time.
Passive Income
In everyday use, passive income is money earned with relatively little ongoing direct work, often from assets or work completed earlier.
Rich
Rich describes having a lot of money, income or valuable assets relative to some comparison. It has no single financial cutoff.
Saving
Saving means setting aside money for later use rather than spending it now.
Student Debt
Student debt is money owed from loans used to pay for education and associated living costs.