What is investing, and how is it different from saving?
Investing is putting money into assets that may grow over time, in exchange for accepting that their value can fall. Here is how it differs from saving, with numbers.
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Investing basics: start here if you are completely new
The ideas every other topic builds on: saving versus investing, risk and return, compounding, inflation and fees, each worked through with real numbers.
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These notes cover the ideas every other topic builds on: what separates investing from saving, why higher expected returns come with more risk, how compounding works over long periods, what inflation does to the buying power of money, and how fees quietly reduce results. Each note works through real numbers calculated in code and links every figure to a regulator, central bank or statistics agency. If you read only one topic on this site, read this one first, in order. Nothing here tells you what to buy; the aim is to make every later decision easier to understand. The notes below are listed in reading order: start at the top, or jump straight to the question you have. Every note ends with its numbered sources.
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How does compound interest work, and why does time matter so much?
Compound interest is interest earned on interest. In year one it looks tiny; after a few decades it can be most of the balance. Here is the arithmetic, step by step.
Read the noteRisk and return explained: why higher potential returns come with bigger risks
Investors who take more risk expect to be paid for it, but the payment is never promised. Here is how the trade-off works, with the arithmetic of losses and volatility.
Read the noteHow does inflation affect your money and your investments?
Inflation does not take money out of your account; it takes buying power out of every dollar. Here is how to measure that loss and think about it as an investor.
Read the noteBefore you invest: a step-by-step checklist for beginners
Most investing mistakes happen before the first purchase. This checklist covers what to have in place first, from emergency savings to checking who you are dealing with.
Read the noteHow do investment fees affect your returns over time?
Fees come out of your balance every year, whether the investment rises or falls. Here is how the SEC's own example turns a 0.75-point fee gap into almost $30,000.
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