Glossary

A capital gain is an increase in the value of an investment, such as stocks, bonds, or real estate, between the time you bought it and the time you sold it. 💰

If you sell an investment for more than you paid for it, you've made a capital gain, and you may be subject to capital gains tax, depending on your local tax laws.

For example, if you bought a stock for $1,000 and later sold it for $1,500, you'd have a capital gain of $500.

Fun fact: In some countries, long-term capital gains (on investments held for more than a year) are taxed at a lower rate than short-term capital gains. 📆 This tax structure is designed to encourage long-term investing and reduce speculation in the markets.