Money Rizz Glossary
Every word, explained simply.
Money words can sound complicated. The goal of Money Rizz is to make them understandable enough to use in real life.
21 terms
Annual growth rate
The average rate something grew per year, smoothed out over time.
Why it matters
It lets you compare different investments on the same yardstick — even if they ran for different lengths of time.
Tiny example
If $100 became $121 over two years, that's roughly a 10% annual growth rate.
Cash
Money you can spend right now, not invested in anything.
Why it matters
Cash is safe and flexible, but it doesn't usually grow much on its own.
Tiny example
The $20 in your wallet is cash. It buys lunch today, but it won't be worth more tomorrow.
Compound growth
Growth that builds on previous growth — earnings that start earning their own earnings.
Why it matters
It's the quiet engine behind long-term investing. Small amounts can become big amounts with enough time.
Tiny example
$100 earning 10% becomes $110. Next year, that 10% is calculated on $110, not $100.
Cost basis
What you originally paid for an investment.
Why it matters
You need it to know if you actually made or lost money — and how much.
Tiny example
If you bought a share for $50 and sell it for $70, your cost basis was $50 and your gain is $20.
Diversification
Spreading your money across different investments instead of putting it all in one place.
Why it matters
If one investment does badly, the others can soften the blow.
Tiny example
Owning a little of many companies — through an ETF — is more diversified than owning one stock.
Dividend
A small payment a company sends to its shareholders, usually from its profits.
Why it matters
Dividends are one way investments can pay you while you still own them.
Tiny example
If you own shares of a company that pays a $0.50 dividend per share, 10 shares pays you $5.
ETF
Exchange-Traded Fund — a basket of many investments you can buy with a single click.
Why it matters
One ETF can give you a slice of hundreds of companies at once. Instant diversification.
Tiny example
An S&P 500 ETF holds 500 of the largest U.S. companies in one neat package.
Fractional share
A slice of a single share — less than one whole share.
Why it matters
It lets you invest with small amounts, even in expensive stocks.
Tiny example
If a share costs $200 and you have $20, you can buy 1/10th of a share.
Index fund
A fund that simply tries to match a market index, like the S&P 500.
Why it matters
It's a low-effort way to own a broad slice of the market without picking individual stocks.
Tiny example
An S&P 500 index fund goes up when the overall U.S. stock market goes up.
Interest
Money paid for the use of money — either to you (on savings) or by you (on debt).
Why it matters
Interest is how cash quietly grows in savings, and how debt quietly grows when unpaid.
Tiny example
A savings account paying 4% interest turns $100 into $104 after a year.
Investing
Putting money into something today with the hope it will be worth more later.
Why it matters
Investing is how money can grow faster than it usually does just sitting in cash.
Tiny example
Buying a share of a company is investing. You're hoping the company grows over time.
Past performance
How an investment has done historically — not a promise of how it will do next.
Why it matters
It's useful context, but it doesn't guarantee the future. Markets change.
Tiny example
A stock up 50% last year might be flat or down this year. The past isn't a contract.
Portfolio
The full collection of investments you own.
Why it matters
Looking at your whole portfolio — not just one stock — shows how you're really doing.
Tiny example
Your portfolio might be 1 ETF, 2 stocks, and some cash in a savings account.
Return
How much an investment has gained (or lost), usually shown as a percentage.
Why it matters
Return is the scoreboard. It tells you whether a choice worked.
Tiny example
Buy a share for $100, sell it for $110 — that's a 10% return.
Reward
The potential upside of an investment — what you might gain if things go well.
Why it matters
Reward is the reason to take any risk at all. Without it, there'd be no point.
Tiny example
Stocks have historically offered higher rewards than savings — and bigger swings along the way.
Risk
The chance that an investment loses value — or doesn't grow as expected.
Why it matters
Every investment has some risk. Understanding it is more important than avoiding it.
Tiny example
A single stock is riskier than an ETF, because one company can fall while many can't all fall at once.
Savings
Money you set aside for later, usually in a safe place that earns a little interest.
Why it matters
Savings is your safety net — money you can reach quickly, without market risk.
Tiny example
Putting $20 a week into a savings account builds a buffer for emergencies.
Share
A single unit of ownership in a company.
Why it matters
Shares are how ownership of a company gets divided into pieces small enough to trade.
Tiny example
Owning 1 share of a company with 1 million shares means you own one-millionth of it.
Stock
A piece of ownership in a company.
Why it matters
When you own a stock, you own a tiny part of a real business — and share in its ups and downs.
Tiny example
Buying 1 share of a coffee company makes you a part-owner of that company.
Total return
Everything an investment earned — price changes plus dividends and interest.
Why it matters
It shows the full picture, not just the price on a chart.
Tiny example
A stock up 5% that also paid 2% in dividends has a 7% total return.
Volatility
How much an investment's price jumps around.
Why it matters
Higher volatility means bigger swings — up and down. It can feel stressful, even when the long-term trend is up.
Tiny example
Tech stocks often have higher volatility than savings accounts. Same direction sometimes, very different ride.
Keep going
Now put the words to work.
Educational content only. Not financial advice.