Plain-language explanations for the terms used across this site — no finance background required.
"Investing is less about timing the market and more about time in the market."
Compounding
Growth building on itself — money you've already earned goes on to earn more, on its own, without you adding anything new.
Covered call (ETF)
A strategy where a fund sells the right for someone else to buy its stocks at a set price later, in exchange for extra cash now. This boosts a fund's payouts, but caps how much it can gain if the stock price rises a lot.
CPP (Canada Pension Plan)
A government pension most working Canadians pay into and later collect in retirement, based on how much and how long they contributed. Usually not enough on its own to live on comfortably, which is part of why building your own investment income matters.
Distribution / Payout
The cash a fund sends you, usually from dividends or investment income it collected. We use "payout" as the plain-language term for this throughout the site.
DRIP (Dividend Reinvestment Plan)
Automatically using your payouts to buy more of the investment instead of receiving them as cash — this is what lets a balance compound instead of just sitting still.
Frequency
How often a fund pays out. "Monthly" means once a month; "semi-monthly" means twice a month.
Goal (income goal)
A specific monthly income amount you're aiming to reach — the Single Fund and Portfolio Mix Calculators' goal mode finds roughly when you'd get there.
Growth & Income Blend
A fund that does both — it pays a regular distribution, but a meaningful part of its overall return has also historically come from its price growing over time, not the payout alone.
Growth Fund
A fund built mainly to grow your money's value over time through its price going up, rather than by paying you cash regularly. It may pay little or no distribution — this site is built around income/DRIP investing, so a growth fund's calculator page still works, but its real strength is price growth, not its payouts.
Horizon
How many years into the future you're looking, when projecting forward instead of solving for a goal.
Income Fund
A fund built mainly to pay you steady cash on a regular schedule, usually monthly, rather than to grow sharply in price. Most funds featured on this site are income funds — investing in them and reinvesting the payouts (DRIP) is what this whole site is built around.
Leverage
Borrowing money to invest more than you actually have. It amplifies both gains and losses — a fund using leverage can fall harder in a weak market, not just cap your upside in a strong one.
MER (Management Expense Ratio)
The yearly fee a fund charges, taken automatically out of its returns — shown as a percent of your investment per year. You don't pay this separately; it's already baked into a fund's performance.
Return of Capital (ROC)
Part of a payout that's technically your own invested money being handed back to you, not new profit. It's common in covered-call and high-yield funds. It usually isn't taxed right away, but it lowers your adjusted cost base, which can mean more tax later when you sell.
Risk tier
Our own rough low/medium/high categorization of a fund, based on things like diversification, use of leverage, and how aggressively it chases yield. It's a starting point for your own judgment, not an official rating.
TFSA (Tax-Free Savings Account)
A registered account type available to Canadian residents where your investments grow without owing tax on the gains. For most people starting out, this is the account type to use before anything else.
Ticker
The short code used to identify a specific fund or stock, like HDIV.TO.
Yield
A fund's yearly payout shown as a percent of your balance — enter 12 to assume it pays out 12% of your balance per year. We call this the "payout rate" in plain language elsewhere on the site.