The percentage rate that consumer prices—things like milk, eggs, gas and more—are expected to rise by in the future. For investing, the goal should be for your long-term investment performance to outpace inflation.

A goal that guides your investment decisions—like trying to retire at a certain age or leave a legacy for your loved ones. Your investment goals are based on things like your personal circumstances, age, risk tolerance and future money needs.

The amount of time you'll keep your money invested—for example, now through when you retire.

A bond is a type of loan between an investor and a corporate or government borrower that promises to repay the money with interest. Since they’re often backed by governments and guarantee a steady return, bonds are seen as a “safe” investment and attract a lot of investors.

But we don’t recommend betting your retirement on bonds because their returns just aren’t impressive, especially when compared to mutual funds, and bonds barely outpace inflation.

A certificate of deposit (CD) is a special kind of savings account that comes with a fixed interest rate. Basically, it’s like giving a bank or credit union a loan from your own pocket. In exchange for lending them a lump sum of your money for a fixed amount of time, they agree to pay you interest until the CD “matures” (that’s the term banks use for when a CD reaches its end date).  

But historically, their interest rates don’t keep up with inflation, which is what makes things more expensive over time. So, they’re not exactly a winning strategy for long-term investing.

Commodities are raw materials like gas, oil, beef, gold and grains. Commodities trading is when you buy and sell these things, and there are many ways to do that. The basic principles of supply and demand typically drive the commodities markets, but factors like weather or political turmoil can play a role in prices.

Exchange-traded products (ETPs) are a common method for buying and selling commodities. An investing pro can help you weigh the pros and cons—but we don’t recommend ETPs since we think the potential rewards don’t balance out the risk. 

Exchange-traded funds are funds that are traded on a stock market exchange. They generally mirror a market index, like the Dow Jones Industrial Average or the S&P 500, by investing in most or all of the company stocks included on that index. So they’re a lot like mutual funds, except they can be traded like stocks.

ETFs that average 10–12% average annual can be good to include in a taxable brokerage account as part of a long-term investing strategy (once you’ve maxed out retirement accounts like your 401(k) or Roth IRA).

Mutual funds are professionally managed investment portfolios that allow investors to pool their money together to invest in something. There are many different types out there that you can talk with an investing pro about. We generally recommend investing evenly across four different types of growth stock mutual funds: growth and income, growth, aggressive growth, and international funds.

Inside a typical growth stock mutual fund are stocks from dozens, sometimes hundreds, of different companies, so you’re basically buying bits and pieces of all those companies. Some of those company stocks go up while others go down, but the idea is that the overall value of the fund should go up and beat inflation over time.

Real estate investing comes in different shapes and sizes. You can purchase a home and live in it. You can purchase properties and rent them out. Or you can flip houses. The idea with any of these investment opportunities is to (hopefully) make a profit.

Your real estate investing funds should be separate from your retirement savings—that’s why we don’t include real estate as part of the investment calculator.

Stocks represent shares (or tiny pieces) of a company. When a company goes public, they sell these small shares to people to fund growth. Picture a big ol’ sheet cake that someone cuts up into lots of small squares. If you purchase one of those squares, you own that slice. When you buy stocks, you become a part owner of the company. Although we don’t recommend single stocks, we do recommend that you invest in growth stock mutual funds.