General Information
Last updated
Last updated
Bonds
Loans (fixed income from interest)
Equities
A piece of a business
Real estate
Physical space (rental income), REITs (e.g. VGSIX)
Commodities
Raw materials, hard (drilling, mining, etc.), soft (plants, animals)
Net income
Total income after expenses (cost revenue + taxes)
Earnings
Same as net income, but for a single share
Dividend
The money that goes to the owner (pay themselves)
Board of Directors
Shareholders, i.e., owners
Income statement
Where Net Income/Earnings can be found
Balance sheet
What would happen if the business liquidated right now (Total assets - Total liabilities = Equity, Book Value is a share's equity)
Cash flow statement
Lesson 2?
Risk is defined as Market Price - Equity
: the closer the equity is to the market price, the safer the investment (Figure 1).
VANGUARD LifeStrategy 100% -> a collection of index funds.