Glossary

Money words, explained simply.

Compound interest

The process by which earned interest is added to the principal and then earns interest itself. Over the long run it is the main engine of growth for invested savings. Wikidata

Inflation

A general, sustained rise in prices that erodes the purchasing power of money: the same amount buys fewer goods and services over time. Wikidata

ETF (exchange-traded fund)

A stock-exchange-listed fund that tracks an index (such as the MSCI World), offering broad diversification at low cost and tradable like a single share. Wikidata

PEA (French equity savings plan)

A French investment account dedicated to European equities whose gains are exempt from income tax after five years (social-security levies still apply).

Livret A

A French government-regulated savings account that is risk-free and instantly available, with a state-set rate and tax-free interest. A natural home for an emergency fund.

Budget

A plan that allocates your income across spending, saving and investing over a given period, so you stay in control of your money and can plan ahead. Wikidata

Emergency fund

Money kept instantly available, typically three to six months of expenses, to absorb unexpected events without taking on debt or selling investments.

Diversification

The strategy of spreading savings across several assets, sectors or regions to reduce a portfolio's overall risk. Wikidata

Volatility

A measure of how much an asset's price swings over a given period. High volatility means large moves, both up and down. Wikidata

Yield / Return

The gain produced by an investment relative to the capital invested, expressed as a percentage. It lets you compare the performance of different investments. Wikidata