Brokerage firms focus on individual stocks and bonds. Some brokerage firms offer mutual funds , but you'll generally pay more than you would at a low-cost mutual fund company. What's left at the end of the month after you've paid all your bills and done all your spending. To find your cash flow, add up all of your expenses for a month and subtract that number from your monthly income. Knowing your cash flow is key to setting a monthly savings goal.
Closing costs The additional costs typically involved in purchasing a piece of real estate.
Compounding Occurs when earnings from an investment are added back into the investment and used to generate further earnings. For example, on bank accounts that pay interest , the interest is typically added to the balance of the account each day, which means that the next day's interest is calculated on a slightly higher amount. Likewise, if you leave your money in a mutual fund , rather than periodically withdrawing earnings on it, it will grow significantly faster. Compounding is the key to the success of long-term investments. Credit rating A rating assigned to you by three major credit bureaus that indicates how likely you are to pay back a loan on time.