investments

Definition

Capital placed somewhere with the expectation of future returns, or what people call their lottery tickets when they want to sound financially sophisticated. Can range from buying stocks and bonds to funding your cousin's cryptocurrency scheme that's 'definitely going to moon.' The difference between an investment and gambling is mostly how you explain losses at dinner parties.

Example Usage

Our portfolio includes investments in emerging markets, sustainable energy, and apparently three different meal-kit startups that all went bankrupt.

Source: Common finance terminology

Related Terms

Advanced

yield to maturity

The total return anticipated on a bond if held until it matures, accounting for current price, par value, coupon interest, and time to maturity. It's what you'll earn assuming the issuer doesn't default, which is a bigger assumption than bond investors like to admit.

💰 Finance / Accounting

Advanced

Derivative

A financial instrument whose value is derived from something else, like a bet on a bet, which is exactly as stable as it sounds. They played a starring role in the 2008 financial crisis, proving that when you stack enough abstractions on top of each other, reality eventually comes knocking.

💰 Finance / Accounting

Beginner

expense

Money that exits your bank account faster than your ability to justify why you needed it in the first place. In business contexts, it's the art of categorizing spending so the tax man won't cry, and in personal finance, it's the stuff that makes you wonder where your paycheck went. Track them obsessively or live in blissful ignorance—there is no middle ground.

💰 Finance / Accounting

Beginner

penny-stock

Stocks trading below $5 per share, typically on over-the-counter markets with minimal regulation or scrutiny. It's where pump-and-dump schemes go to flourish and retail investors go to lose their money quickly.

💰 Finance / Accounting

Intermediate

Overhead Allocation

The process of distributing indirect costs across products or departments, often using arbitrary methods that accountants swear are reasonable. It's making sure everyone shares blame for the heating bill and executive salaries.

💰 Finance / Accounting

Intermediate

subprime

A polite financial euphemism for 'risky as hell' that describes loans given to borrowers with sketchy credit histories at interest rates that would make a loan shark blush. These loans were so responsible they nearly collapsed the global economy in 2008. Now used as both a technical term and a cautionary tale.

💰 Finance / Accounting

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