It is my opinion that finance terminologies are crazy over complicated for what they are and the system and people working for it make more difficult than what they are for x reason... Here are some good terms anyone into finance should know.

Stock and Bonds

Stocks will outperform over the long term
From Buffett: It's been idiotic to buy long bonds

Stocks	Bonds
Makes you an owner	Makes you a lender
You claim part of a company's assets + earnings	You earn interest
No guarantee to get money back	Payment due to you on date of maturity

Index Fund vs ETF vs Mutual Fund

Index Funds are a type of Mutual Funds
All index funds are mutual funds, but not all mutual funds are index funds

Chronological order of creation: Mutual Fund -> Index Fund -> ETF

Index Fund	ETF (Exchanged-Traded Funds)	Mutual Fund
You can own multiple stocks by buying 1 index fund You can only buy shares once a day	You can own multiple stocks by buying 1 index fund You can buy/sell shares whenever the stock market is open ETF is not really a stock but you can buy as if it were a stock It trades like a stock so you can watch it go up and down, so it's added temptation to sell, not a good long term strategy	You can own multiple stocks by buying 1 mutual fund
Diversification		Diversification (90 stocks at a minimum)
Passive managed, which eliminates the need for active management. For example the S&P 500 Index. Since this index fund only buys whatever index it's on there, and you're not paying someone to oversee it, the fees are much much lower as 0.04%	Same as Index Fund	Managed by investment professionals They charge fees (called active management)
Automatic reinvestment from your checking account	Not Automatic investment