Library

Explore the library

Investing basics—in plain English.

What is Year-to-date (YTD)?

Updated Aug 16, 2022Robinhood Learn

What is Year-to-date (YTD)?

YTD is like your car’s odometer. The dometer represents the number of miles you’ve driven since the beginning of a certain period. Likewise, YTD represents the passage of days since the beginning of a certain period.

What is Modified Adjusted Gross Income (MAGI)?

Updated Aug 13, 2022Robinhood Learn

What is Modified Adjusted Gross Income (MAGI)?

Modified adjusted gross income is like an airline size limit for your luggage. You’ll need to put your income (your bag) on the scale (through a series of calculations). If it’s too big, you may have to check your bag and pay more in fees (taxes).

What is a net operating loss (NOL)?

Updated Aug 13, 2022Robinhood Learn

What is a net operating loss (NOL)?

A net operating loss is a credit you can use down the line. If your business has a less-than-stellar tax year, you can apply the credit at a more profitable time.

What is Collateral?

Updated Aug 13, 2022Robinhood Learn

What is Collateral?

Just like you hope you never have to use your insurance for an emergency, your lender hopes they don’t have to seize your collateral. But at least they know it’s there to help reduce their losses if they need it.

What is a Contingent Beneficiary

Updated Aug 13, 2022Robinhood Learn

What is a Contingent Beneficiary

Your primary beneficiary is Plan A. When you die, your primary beneficiary is the person you most want to receive your life insurance benefit. Most often, this person is an immediate family member like a spouse, parent, or adult child.

What is an Inheritance?

Updated Aug 13, 2022Robinhood Learn

What is an Inheritance?

An inheritance is like a gift. You may or may not know what your parent, grandparent, or other loved one plans to give you — The gift they leave as an inheritance may be unexpected, though it’s something you may cherish as a lasting legacy from them.

What is Disposable Income

Updated Aug 13, 2022Robinhood Learn

What is Disposable Income

Whenever you go to the doctor’s office, the nurse or doctor takes your blood pressure. They use that as an indicator of your overall health. Your disposable personal income is an indicator of your family’s financial health.

What is a Pension?

Updated Aug 13, 2022Robinhood Learn

What is a Pension?

A pension plan is like your employer planting a garden for you. While you work, your employer plants seeds. They hope the seeds will grow enough food for your retirement. If the garden doesn’t provide enough, they’ll buy you food.

What is Deferred Compensation

Updated Aug 13, 2022Robinhood Learn

What is Deferred Compensation

When you participate in a deferred compensation plan, you can have money taken out of your paycheck and put into an account for the future. Then, when a rainy day comes along, you can begin to withdraw the money.

What is an Exempt Employee?

Updated Aug 13, 2022Robinhood Learn

What is an Exempt Employee?

An exempt employee is like a monthly music subscription. You pay the exempt employee more money (a monthly salary), but you don’t pay extra the more work you give them.

What is Tax Withholding?

Updated Aug 13, 2022Robinhood Learn

What is Tax Withholding?

Your landlord wants to be paid every month that you live in their building, not just in a lump sum at the end of the year. Likewise, the IRS wants to be paid taxes on your income as you’re earning it, not after the fact.

What is Retirement Planning?

Updated Aug 13, 2022Robinhood Learn

What is Retirement Planning?

Retirement planning is like planting a tree. Like growing a tree from a sapling, retirement planning can’t be done overnight. It takes a long time of careful planning and effort to grow a strong retirement that you can enjoy.

What is the Social Security Administration (SSA)?

Updated Aug 13, 2022Robinhood Learn

What is the Social Security Administration (SSA)?

The Social Security Administration is like a payroll firm for the retired and disabled. It doesn’t employ you, but it’s responsible for cutting you your monthly check.

What is the Social Security Tax?

Updated Aug 13, 2022Robinhood Learn

What is the Social Security Tax?

Everyone pays a Social Security tax to fund the Social Security program. Then, when an individual retires or becomes disabled, they are paid a monthly check out of the savings account.

What is a Progressive Tax?

Updated Aug 13, 2022Robinhood Learn

What is a Progressive Tax?

A progressive tax system is like an airplane. The better (or worse) the seat you have on the plane, the higher (or lower) the cost you’ll have to pay for your ticket. Similarly, the better your income, the more you have to pay in taxes.

What is Copay?

Updated Aug 13, 2022Robinhood Learn

What is Copay?

A copay is like eating at a buffet. At a buffet, the cost is the same no matter what you eat. But you can’t eat if you don’t pay. With a copay, the amount you have to pay is the same no matter what, but you have to pay the copay to get medical care.

What is Net Worth?

Updated Aug 13, 2022Robinhood Learn

What is Net Worth?

Net worth is what you have left after accounting for all your debts. To build your net worth, you’ll need to either increase your assets (like cash or equity in a business) or decrease your debts (pay off your student loans or credit card bills).

What is the Old-Age, Survivors, and Disability Insurance (OASDI) Program?

Updated Aug 13, 2022Robinhood Learn

What is the Old-Age, Survivors, and Disability Insurance (OASDI) Program?

Over the years, you contribute money to OASDI through your taxes and your money is waiting for you when you’re ready to take it out. You can only take out funds once you’re at least 67 or become disabled, and you can’t get them all at once.

What is a Custodian?

Updated Aug 13, 2022Robinhood Learn

What is a Custodian?

A safe keeps your valuables secure, just like a custodian bank does with your electronic and physical investments. You can get to your assets when you need to, but the custodian acts as an intermediary and keeps them safe in the meantime.

What is Supply Chain Management (SCM)?

Updated Aug 09, 2022Robinhood Learn

What is Supply Chain Management (SCM)?

Supply chain management is like a restaurant meal coming together. A restaurant is a compact supply chain. Raw materials are transformed into a dining experience. The goal is to satisfy the customer in the most efficient and profitable way possible.

What is Enterprise Resource Planning (ERP)?

Updated Aug 02, 2022Robinhood Learn

What is Enterprise Resource Planning (ERP)?

Enterprise Resource Planning (ERP) is kind of like urban planning. When you plan a city, you need to make sure all the facilities are connected to each other and have easy access to all the important city information.

What is a Certified Check?

Updated Aug 02, 2022Robinhood Learn

What is a Certified Check?

A certified check is like collateral on a loan. When you enter into a financial agreement with another party, they want to know they'll get the money you promised. In the case of a check, the payee might have your bank certify the check.

What is a Credit Privacy Number (CPN)

Updated Aug 02, 2022Robinhood Learn

What is a Credit Privacy Number (CPN)

When you’re wearing a good costume, your mask and outfit conceal your real identity, and no one knows who you really are. Similarly, a CPN purports to mask your identity and credit history. Unfortunately, you can’t use your CPN in the real world.

What is a Bridge Loan?

Updated Aug 02, 2022Robinhood Learn

What is a Bridge Loan?

A bridge loan is like using your credit card for a large purchase right before payday. The money isn’t in your checking account just yet, but you know it will be in a few days.

What is an Appraisal?

Updated Aug 02, 2022Robinhood Learn

What is an Appraisal?

An appraisal is like an Olympic judge's opinion. The audience may love an athlete's performance, but it's the judges' scores that matter. If an appraiser determines a home's worth is under market value, it's less likely to get a loan for more.

What is Cash?

Updated Aug 02, 2022Robinhood Learn

What is Cash?

Cash is almost anything that you could give your friend to pay them back when they cover your meal at a restaurant. You might hand her a $20 bill, but you could just as easily use an app to send an electronic transfer from your bank account.

What is a Budget Deficit?

Updated Aug 02, 2022Robinhood Learn

What is a Budget Deficit?

A budget deficit is like not bringing enough food on a trip. If you go for a long hike and camp in the woods, but run out of food, your body will enter a calorie deficit, which is like going into debt or dipping into your savings.

What is an Income Statement?

Updated Aug 02, 2022Robinhood Learn

What is an Income Statement?

An income statement is kind of like a video reel... It calculates a company’s net profit, by adding total revenue and subtracting total costs over a specific period of time. It’s one of the most widely cited financial statements.

What is Beta?

Updated Aug 02, 2022Robinhood Learn

What is Beta?

Beta's a tool to measure a stock's volatility... Beta compares the movement of a stock to the broader moves of the market. The more volatile a stock or other traded investment is, the higher its beta tends to be.

What is EPS?

Updated Aug 02, 2022Robinhood Learn

What is EPS?

EPS is one tool to help investors get to know a stock… Earnings per share shows what part of a company’s total profits is “owned” by each individual share. Tracking a company’s EPS over time helps you assess the stock’s change in value over time.

What is a Variable Cost?

Updated Aug 02, 2022Robinhood Learn

What is a Variable Cost?

When you drive your car, you have to fill up the tank. The amount you spend on fuel is directly related to how much you use your car. Similarly, how much a business spends on variable costs is directly connected to how many items it produces.

What is Insider Trading?

Updated Jul 31, 2022Robinhood Learn

What is Insider Trading?

Insider trading is like seeing the test a day before taking it. While all the other students must study all of the material, you have inside information about what you need to know and which areas to focus on.

What is Encroachment?

Updated Jul 31, 2022Robinhood Learn

What is Encroachment?

Encroachment is like an offside penalty in a football game. Each team has the right to stand anywhere they’d like on their side of the line of scrimmage. If a player crosses into the other team’s area, they’re encroaching on that team’s property.

What is a Present Value?

Updated Jul 31, 2022Robinhood Learn

What is a Present Value?

Present value is like a time machine for money. By understanding present value, you see what your future money is worth today. And it also helps you know what the money you have today could be worth in the future.

What are Articles of Incorporation?

Updated Jul 31, 2022Robinhood Learn

What are Articles of Incorporation?

Filing your articles of incorporation tells your state everything they need to know about you and gives you the right to do business in your state.

What is a Certificate of Insurance (COI)?

Updated Jul 31, 2022Robinhood Learn

What is a Certificate of Insurance (COI)?

A COI is kind of like a driver’s license. By carrying your driver’s license, you can show law enforcement that you’re allowed to drive. Similarly, your certificate of insurance allows you to prove to clients that you or your business are insured.

What is Accrual Accounting?

Updated Jul 31, 2022Robinhood Learn

What is Accrual Accounting?

Accrual accounting keeps track of every move a business makes, even if no cash is exchanged.

What is Commercial Real Estate (CRE)?

Updated Jul 31, 2022Robinhood Learn

What is Commercial Real Estate (CRE)?

Commercial real estate is like setting up a lemonade stand in your driveway. That site is commercial real estate, because its purpose is business - to sell lemonade. But your home itself is residential - its purpose is to be lived in.

What is Asset Management?

Updated Jul 31, 2022Robinhood Learn

What is Asset Management?

Asset management is like hiring a personal trainer for your finances. They have expertise that can help you get your finances in shape better like a personal trainer does for your body.

What is an Investment Banker?

Updated Jul 31, 2022Robinhood Learn

What is an Investment Banker?

Investment bankers can help companies get the money they need by connecting them with potential investors. To do that, the investment banker has to convince the investors that your business is worth the risk of them investing their cash.

How to start investing for as little as 1 dollar

Updated May 20, 2022Robinhood Learn

How to start investing for as little as 1 dollar

Investing in the stock market doesn’t mean you need to have thousands, or even hundreds of dollars to get started. Even if you have just one extra dollar, fractional shares (which are offered on Robinhood) can help you build your portfolio.

What is a crypto wallet?

Updated May 17, 2022Robinhood Learn

What is a crypto wallet?

Crypto wallets provide you with secure access to your crypto for managing, spending, and sending.

How can I start budgeting? Learn how to spend, save, and invest

Updated Aug 02, 2021Robinhood Learn

How can I start budgeting? Learn how to spend, save, and invest

Before you can save or invest, you probably have to cover the basics: food, housing, healthcare, transportation, and insurance. If you’re able to, it’s helpful to spend less money than you earn. It’s one of the keys to building wealth.

How to read an S-1

Updated Mar 23, 2021Robinhood Learn

How to read an S-1

If a company wants to go public in the US, it must file a Form S-1 with the Securities and Exchange Commission. Also called a registration statement, the form includes details on the company’s business, managers, future plans, and finances.

Welcome: Investing 101

Updated Feb 02, 2021Robinhood Learn

Welcome: Investing 101

Ready to invest, but don't know where to start?

The stock market has been super volatile – How can I make sense of it?

Updated Jan 30, 2021Robinhood Learn

The stock market has been super volatile – How can I make sense of it?

Volatility is like turbulence during a flight. You don’t know when it’ll strike or how severe it'll be. Many investors use standard deviation as a proxy for volatility, estimating the degree to which a stock fluctuates from its average price.

What’s the purpose of a diversified portfolio?

Updated Jan 15, 2021Robinhood Learn

What’s the purpose of a diversified portfolio?

A diversified portfolio is kind of like a nutritious diet... The better you spread your investments across different assets, the less likely they are to all experience a loss. Or in other words, your aggregate losses will likely be less severe.

Picking an investment: How to approach analyzing a stock

Updated Jan 15, 2021Robinhood Learn

Picking an investment: How to approach analyzing a stock

Investing is like shopping for a car, but more consequential. You start with your personal needs, style, and objectives. Consider different makes and models, and compare choices based on key metrics. Then, make a decision that works for you.

What can I invest in? An overview of assets

Updated Jan 15, 2021Robinhood Learn

What can I invest in? An overview of assets

Investing is the act of purchasing an asset in the hope that it will deliver some profit, potentially through appreciation, dividends, or interest. Examples of investments include stocks, bonds, ETFs, and real estate.

Does a market “selloff” mean long-term investors should sell?

Updated Jan 07, 2021Robinhood Learn

Does a market “selloff” mean long-term investors should sell?

Long-term investing is like seeking cover during an earthquake. Basic preparedness, like staying away from windows and heavy furniture, can help you stay strong during a difficult time. Likewise, long-term investing usually requires calm and caution.

Interest rates are at their lowest since 2008 — What does that mean?

Updated Jan 07, 2021Robinhood Learn

Interest rates are at their lowest since 2008 — What does that mean?

Adjusting the fed funds rate is like training as a weight lifter. The Fed raises interest rates (adds weight) to make loans more expensive, helping to manage inflation. To boost the economy, it lowers rates (removes weight) to make borrowing cheaper.

We’re in a bear market — So, what does that mean?

Updated Jan 07, 2021Robinhood Learn

We’re in a bear market — So, what does that mean?

Investing in a bear market is kind of like bungee jumping. History indicates that the stock market bounces back from its declines. However, you must be aware, the bottom could fall out, leaving the economy and your investments in freefall.

Three charts that help explain this year’s stock market volatility

Updated Jan 07, 2021Robinhood Learn

Three charts that help explain this year’s stock market volatility

The stock market’s reaction to COVID-19 has been, well, vicious. Here, we reflect on how the 2020 decline compares to other historic drops, what investors are paying for bonds, and how the Fed’s interest rate policy compares to recent history.

Why should I think about investing?

Updated Dec 21, 2020Robinhood Learn

Why should I think about investing?

Like planting a tomato patch, investing requires time and patience. Often, there are challenges along the way. But with care and consistency, you give yourself the chance to build a rich harvest. So, let’s see that green thumb.

Bitcoin’s mining reward is about to be cut in half — What investors should know about the “Halvening”

Updated Nov 25, 2020Robinhood Learn

Bitcoin’s mining reward is about to be cut in half — What investors should know about the “Halvening”

Every 210,000 blocks, the reward for mining bitcoin gets cut in half, a process that’s designed to repeat until 21 million units have been created. Based on current activity, the “block reward” is expected to drop to 6.25 bitcoins on May 11, 2020.

Three things to do before you start investing

Updated Nov 25, 2020Robinhood Learn

Three things to do before you start investing

Your investment plan starts with a few key questions: Where are you now? And where do you want to be in the future? You can prepare to invest by reflecting on your goals, paying off high-interest debt, and creating an emergency fund.

How much should I save for retirement?

Updated Nov 25, 2020Robinhood Learn

How much should I save for retirement?

Saving for retirement is like preparing for a long vacation. While you can’t pinpoint the exact cost of the entire trip, you’ll need to save enough so you hopefully don’t run out of money along the way.

Investing during times of uncertainty

Updated Nov 25, 2020Robinhood Learn

Investing during times of uncertainty

Everything about 2020 has been unprecedented, from COVID-19 to the US presidential race. This year, millions of new investors experienced the stock market’s highs and lows, a reflection of the uncertainty that gripped our nation.

I’m in my 20s — How should I approach investing?

Updated Jul 14, 2020Robinhood Learn

I’m in my 20s — How should I approach investing?

At Robinhood, we’ve got a BOMB acronym to help you think about your financial life. So, here are four tips on how to Budget, Organize, Maximize, and Balance your finances to help tee up your investing journey.