Investing term

What is Time horizon?

How long until you need to spend the money you're investing.

Time horizon is how long until you'll need to spend the money you're investing, and it should drive nearly every decision. A long horizon lets you hold volatile, higher-returning assets and ride out crashes; a short one demands safety, since you can't risk a downturn just before you spend. Matching assets to horizon is the foundation of sensible investing.

For example

Retirement money 30 years away can sit entirely in stocks; a house deposit needed in two years belongs in cash or short-term bonds.

Time horizon is taught hands-on in Stage 1 — Money, Goals & Your Financial Foundation.

See the lesson →

Related terms

APRAnnual Percentage Rate. The yearly interest cost of a loan, including most fees.CompoundingWhen your returns earn returns of their own, so money grows faster the longer it's invested.Emergency fundCash reserved for unexpected expenses, usually 3–6 months of your usual spending.Employer matchFree money from an employer that matches part of what you contribute to a workplace retirement plan.
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