The library
Understand the number before you use it.
Every metric on this site has a formula and a formula has limits. These explainers cover both.
Real Estate
Gross yield vs. net yield: which one should you trust?
Two properties can have the same gross yield and completely different returns. Here's why net yield tells the real story.
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Cap rate vs. cash-on-cash return, explained with one example
Same property, two very different numbers. Understanding why they diverge is the key to understanding leverage.
Read the article→Stocks & Income
How to read a dividend yield without getting fooled by it
A high yield can mean a bargain or a warning sign. Here's how to tell the difference before you buy.
Read the article→Real Estate
What is a good cap rate? It depends on what you are buying
Cap rates are a price tag on risk. Here's how to judge one against the property, the market, and the cost of borrowing.
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15-year vs. 30-year mortgage: what the numbers really say
The shorter loan saves a fortune in interest. The longer one buys flexibility. One worked example shows the real trade-off.
Read the article→General
Compound interest explained: why time matters more than the rate
Compounding is slow, then sudden. A worked example shows why starting ten years earlier beats almost any rate you can find.
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ROI vs. CAGR: which return number should you trust?
An 80% return sounds better than 12% a year — until you notice they describe the same investment. Here's when to use each.
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Nominal vs. real return: what inflation does to your results
A 7% return in a 3% inflation world is closer to 4%. Here's how to turn headline returns into purchasing power.
Read the article→Fixed Income
Current yield vs. yield to maturity: how to read a bond's yield
A bond can quote two yields that disagree. Knowing why tells you whether you're buying at a discount or paying a premium.
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The 28/36 rule explained: what lenders let you spend on housing
Lenders cap your payment with two ratios, and only the tighter one counts. A worked example shows which one limits you.
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The 4% rule explained: where 25 times your spending comes from
Twenty-five times your yearly spending is the classic target. Here's where the number comes from, and when to aim higher.
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When does refinancing pay off? The break-even point explained
Dividing the costs by the monthly savings is the usual shortcut. It can flatter a new 30-year loan and undersell a shorter one.
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Rent vs. buy: why the answer depends on how long you stay
Buying costs more up front and pays off with time. The price-to-rent ratio and your time horizon tell you which side wins.
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How amortization works: why early payments are mostly interest
Your payment never changes, but what it buys does. One loan, month by month, shows where the money goes and what extra payments do.
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France's 35% debt-to-income rule: how much French banks let you borrow
One ratio decides most French home loans: all loan payments, insurance included, within 35% of net income. Here's how it works.
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French notary fees: how much to budget when you buy a home
"Notary fees" in France are mostly taxes. Here's what they include, why they are lower on new homes, and how much to set aside.
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