Investing · Module 3 of 11
What you can actually own
Stocks, bonds, funds and index funds explained, plus the yearly fee that never sends you a bill.
Key terms in What you can actually own
- Stock
A stock is a share of ownership in a company, which is why stocks are also called equities. Shareholders may receive part of a company's profits as payments and can sell their shares to other investors. The share price moves with the market's view of the company, so it can rise or fall after purchase.
Source: FINRA, Stocks
- Dividend
A dividend is a payment a company makes to its shareholders out of its profits. Boards of directors decide whether to pay one and how large it will be, and many companies pay none at all. Dividends are one of two ways stocks can produce a return, the other being a higher sale price than the purchase price.
Source: FINRA, Stocks
- Maturity date
A bond's maturity date is the day the issuer must repay the face value, also called par value, and make its last interest payment. It is set when the bond is first issued. Bonds are commonly grouped as short-term, intermediate-term, or long-term according to how far away that date sits.
Source: FINRA, Bonds
- Expense ratio
An expense ratio is the percentage of a fund's total assets that goes each year to cover its operating costs, such as management and administration. It is reported in the fund's prospectus and on its website. Because the charge is taken from fund assets rather than billed separately, it lowers a fund's results relative to the market it tracks.
Every term on Lever is in the money glossary.
About this module
What you can actually own is part of Investing, one of 15 subjects in Lever. It’s a short run of 10 lessons, about 25 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Investing
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1
Why money cannot sit still
Why cash slowly loses value, what it means to put money to work, and which money shouldn’t be invested at all.
7 lessons -
2
What risk actually is
What risk really means, why higher returns come with bigger swings, and how much ups and downs you can live with.
9 lessons -
4
Actually starting
Open the account, start small, invest a set amount on a schedule, and keep an eye on fees.
7 lessons -
5
The days you cannot pick
Why staying invested usually beats trying to time the market, and why the latest news is a poor guide.
5 lessons -
6
The account with a tax break
Retirement accounts with tax breaks, free money from an employer match, and paying tax now or later.
5 lessons -
7
Limits, locks and deadlines
How much you can put into tax-advantaged accounts, the cost of taking money out early, and the deadlines to know.
6 lessons -
8
Moving it and naming it
What happens to your retirement account when you change jobs, and accounts meant for one specific purpose.
5 lessons -
9
Spending what you saved
How much you can take out each year in retirement without running out, and why the order of good and bad years matters.
5 lessons -
10
The mix that shifts
Choosing your mix of investments, rebalancing when it drifts, and all-in-one funds that do it for you.
7 lessons -
11
Choosing where it goes
Which account to fill first, which investments to keep where, and how to do it all if you work for yourself.
6 lessons
Try this module
It’s part of Investing. Lever will bring it to you when you’re ready, or you can go straight there.