appreciation

Definition

When an asset increases in value over time without you lifting a finger—the financial equivalent of your wine collection getting better with age. It's what homeowners brag about at parties and what makes early Bitcoin investors insufferable. The opposite of depreciation, and the reason everyone thinks they're a real estate genius in a bull market.

Example Usage

Thanks to appreciation, her $200,000 house from 2010 is now worth $450,000, making her feel like a financial wizard despite doing absolutely nothing.

Source: Finance and real estate terminology

Related Terms

Beginner

sunk cost

Money already spent that cannot be recovered and therefore should not factor into future decisions, though humans are psychologically terrible at ignoring it. Your brain keeps asking 'but what about the money we already spent?' and economics keeps answering 'it's gone, move on.'

💰 Finance / Accounting

Intermediate

turnover

Either the total sales a company racks up in a period, or the depressing rate at which employees flee for greener pastures—context is everything. In finance, high turnover is great; in HR, it's a red flag the size of a building. It can also refer to how quickly inventory or assets get cycled through, because apparently one word needs to do the work of five.

💰 Finance / Accounting

Beginner

Cash Flow

The movement of money in and out of a business, which in most startups flows primarily in the out direction at an alarming velocity. Positive cash flow means more money coming in than going out, a concept that seems simple until you try to actually achieve it.

💰 Finance / Accounting

Intermediate

crypto

Short for cryptocurrency, the digital money that exists entirely in the cloud and whose value fluctuates more wildly than your mood on a Monday morning. It's either the future of finance or the world's most elaborate Ponzi scheme, depending on whether you bought Bitcoin at $100 or $60,000. Also refers to cryptography, the actual useful technology that crypto enthusiasts sometimes remember exists.

💰 Finance / Accounting

Advanced

credit default swap

An insurance contract against a borrower defaulting on debt, except it's called a 'swap' instead of insurance to avoid pesky insurance regulations. The financial instrument that nearly destroyed the global economy in 2008.

💰 Finance / Accounting

Beginner

gross profit margin

The percentage of revenue remaining after subtracting cost of goods sold, revealing how much you make before paying for all the other stuff that keeps businesses running. High margins are good; low margins mean you're working hard to stay broke.

💰 Finance / Accounting

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