10 FINANCIAL TERMS YOU MUST KNOW IN 2025 TO TAKE CONTROL OF YOUR MONEY

Understanding money doesn’t have to be complicated. In today’s fast-moving financial world, knowing just a few key terms can help you make smarter money decisions—whether you're a salaried professional, a small business owner, a first-time investor, or someone saving for your child’s education or dream home.

These 10 essential financial terms are your toolkit for building confidence and taking charge of your financial journey in 2025.
Let’s break them down in the simplest way possible ????

1 SIP (Systematic Investment Plan)

A SIP is like a financial fitness plan—it lets you invest a fixed amount regularly in mutual funds, such as ?500 or even just ?100 a day. It’s one of the simplest and most effective ways to build wealth steadily, without worrying about market ups and downs.

NOTE: SIPs promote disciplined investing and benefit from the power of compounding.

2 NAV (Net Asset Value)

NAV is the price of one unit of a mutual fund—similar to the MRP on a product or the share price of a fund. It’s calculated by dividing the fund’s total assets by the number of units.

NOTE: NAV tells you how much you’ll pay per unit when you invest in a mutual fund.

3 CAGR (Compound Annual Growth Rate)

CAGR shows the average annual growth of your investment over a period, factoring in compounding.

NOTE: It gives a more accurate picture of long-term returns than just overall percentage gain—perfect for comparing different investment options.

4 ELSS (Equity Linked Saving Scheme)

ELSS is a type of mutual fund that offers tax benefits under Section 80C and invests primarily in equities. It comes with a 3-year lock-in period—the shortest among tax-saving options.

NOTE: You save tax and get the potential for higher returns compared to traditional tax-saving instruments.

5 Emergency Fund

An emergency fund is your financial cushion—typically 3 to 6 months of your essential expenses—kept aside for unexpected situations like job loss or medical emergencies.

NOTE: It helps you stay financially stable without touching your long-term investments.

6 Asset Allocation

This is how you divide your investments across different asset classes like equity, debt, and gold—based on your risk tolerance and financial goals.

NOTE: Good allocation = lower risk + balanced growth.

Smart asset allocation balances risk and return, making your portfolio more resilient.

7 Inflation

Inflation is the rise in the price of goods and services over time. It reduces the purchasing power of your money.

NOTE:  If inflation is 6% and your savings grow at 4%, you’re actually losing money!

8 Risk Appetite

Risk appetite is your ability and willingness to handle ups and downs in investment returns. It varies with age, income, and financial goals.

NOTE: Knowing your risk appetite helps you choose the right mix of investments.

9 Diversification

Diversification means spreading your money across various investments so that poor performance in one doesn’t ruin your entire portfolio.

NOTE: It reduces risk and increases the chances of more stable returns.

10 Compounding

Compounding is when your investment earns returns—and then those returns earn more returns over time.

NOTE: The earlier you start investing, the more compounding works in your Favor—turning small amounts into significant wealth.

Bottom Line:

These 10 terms are the building blocks of financial literacy. You don’t need to be a finance expert—just understanding these basics puts you ahead of 80% of the population.

In 2025, don’t just save—invest smartly, grow your money with purpose, and take full control of your financial future.

Every smart investor started right here.

 Want Help Getting Started?

At GIIS Financial, we make investments simple. Let us help you start your SIP, choose the right fund, and plan your goals.

 Reply “KNOW” on WhatsApp for a free 10-min consultation.
Trusted by 5000+ families | 20+ years of experience

Act Now Before the Best Opportunities Slip Away!

Visit Us: Pratap Tower, 2nd Floor, Bistupur, Jamshedpur, 831001
Call for a Free Consultation: 9153891015

To know more 

You can also use GIIS Financial tools or Our Android App  for Investment, tracking and Asset allocation planning. 

*Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.

Share On