Glossary
Short definitions for the words I use in lessons, calculators, and weekly posts.
New to investing? Start with the free lessons or browse the library.
- SIP
- Systematic Investment Plan: investing a fixed amount every month, automatically.
- Lumpsum
- Investing a big amount in one go, instead of monthly.
- Direct plan
- A mutual fund bought without a distributor, so you don't pay their yearly commission.
- ETF
- Exchange-traded fund: a basket of stocks or gold you buy on the stock exchange.
- Expense ratio / TER
- The yearly fee a fund charges, as a % of your money.
- Corpus
- The total pot of money you've built up, or need to build.
- Step-up SIP
- Raising your monthly SIP every year, usually when your salary goes up.
- Rebalancing
- Moving money between equity, debt, and gold to get back to your planned mix.
- Financial freedom
- Having enough invested that work becomes a choice: your money can pay for your life.
- Index fund
- A fund that copies a market index (e.g. Nifty 50) instead of picking individual stocks.
- Equity
- Ownership in companies, usually via stocks or equity mutual funds. Higher ups and downs, higher long-term growth potential.
- Debt
- Safer, steadier assets: FDs, EPF, PPF, debt mutual funds. Lower return, lower drama.
- Term plan
- Pure life insurance that pays your family if you die during the term. No investment mixed in.
- ULIP
- Unit-linked insurance plan. It mixes insurance with market investments; often complex and costly.
- CAS
- Consolidated Account Statement: one report listing all your mutual fund holdings across platforms.
- Inflation
- Prices rising over time. It's why today's freedom number won't be enough in 20 years without a bigger pot.
- Emergency fund
- About 6 months of spending kept in FD or savings, so you never sell investments in a panic.
- Rule of 72
- Quick maths: 72 ÷ yearly return % ≈ years for money to double (or for prices to double at a given inflation %).
- F&O
- Futures and options: leveraged trading. Most individual traders lose money; not a path to freedom for beginners.