Glossary

The terms, defined

Every financial and modeling term that shows up in the simulator, gathered in one place — each one explained down to how we actually compute the value.

Stocks

Adjusted close: The closing price after accounting for dividends and stock splits. PastFi computes it in its own pipeline from splits and dividends rather than relying on the vendor's number.
Dollar-cost averagingDCA: Investing a fixed amount on a schedule regardless of price — buying more shares when prices are low and fewer when high. Every contribution in the stock model is dollar-cost averaged in at that month's real price.
Total return: Gains from both price appreciation and dividends. Because dividends are baked into adjusted close, the stock model's returns are total returns.
Expense ratio: A fund's annual management fee. It's converted to a compounded monthly drag and deducted at month-end — the simulator surfaces it rather than burying it.

Real estate

Zillow Home Value IndexZHVI: A smoothed, seasonally adjusted index of typical home values for a region. It sets the purchase price and tracks the ongoing home value in the real estate model.
Zillow Observed Rent IndexZORI: A smoothed index of asking rents for a region, used as the gross monthly rent before vacancy and expenses.
Amortization: Spreading a fixed-rate loan into equal monthly payments. Each payment covers that month's interest on the remaining balance, with the rest reducing principal — so as the balance falls, less goes to interest and more to principal.
Equity: What you actually own in the property: current home value minus outstanding loan balance (Hₜ − Bₜ). Grows through both principal paydown and price appreciation.
Portfolio value: The comprehensive net figure shown for real estate: home appreciation + cumulative rent − mortgage, expenses and taxes − a 5% realtor fee and 2% closing costs + (down payment + principal paid). A 'what would I net if I sold today' number.
Vacancy rate: The share of time a rental sits empty earning nothing. The real estate model uses a fixed 8.3% (roughly one month per year), applied as a reduction to gross ZORI rent.
Operating expenses: Ongoing rental costs — maintenance, insurance, management — modeled at 35% of gross ZORI rent. Property tax is tracked separately.
Extra monthly payment: The Real Estate card's 'Recurring payment' field — an optional amount added to each mortgage payment and applied entirely to principal, paying the loan down faster. Not a separate purchase or investment.
Private mortgage insurancePMI: Insurance lenders typically require when the down payment is below 20% of the purchase price. The simulator warns below that threshold but does not add PMI costs or the higher rates low-down-payment loans usually carry — the minimum allowed down payment is 3%.

Metrics

Compound Annual Growth RateCAGR: The constant yearly rate that links the first and last values of the curve — a single number that smooths out volatility. Anchored to the first month's value, so it can read high when most of your money arrives through later contributions.
Max drawdownMDD: The largest peak-to-trough decline along the value curve, as a fraction of the peak. It describes the worst dip on the path, even if the curve later recovered.

General

Federal Funds effective rate: The benchmark U.S. overnight lending rate (FRED FEDFUNDS). Drawn as a faint reference line behind the chart to show the rate environment — it never enters any asset's value.
Nominal: Values shown in the dollars of their own time, with no inflation adjustment. Every number in PastFi is nominal — a 2015 dollar and a 2026 dollar are shown at face value.