Reference · All Layers
Investing & Tax Glossary
20 plain-English definitions across all five curriculum layers — from emergency funds and DCA through to SMSF structures and Bitcoin cycle signals. Each term links directly to the lesson where it matters most.
Foundations
Compound Interest
Interest earned on both your original principal and on all interest previously accumulated. Often called the 'eighth wonder of the world', it means your money grows exponentially the longer you leave it invested. Even small differences in start date or contribution amount create dramatically different outcomes over 20–30 years.
The Power of Compounding →Emergency Fund
A cash buffer (typically 3–6 months of living expenses) held in a High-Interest Savings Account or mortgage offset account that protects you from forced asset sales during unexpected income shocks. Without one, a job loss or medical bill can force you to sell investments at the worst time. This is the first financial priority before any investing begins.
Build Your Emergency Fund →Rule of 72
A quick mental maths shortcut for estimating how long an investment takes to double: divide 72 by the annual return percentage. At 6% per year, your money doubles in roughly 12 years; at 9%, in 8 years. It also works in reverse — a 3% inflation rate halves your purchasing power in 24 years.
Learn the Rule of 72 →Dollar-Cost Averaging (DCA)
An investment strategy where you buy a fixed dollar amount of an asset at regular intervals (e.g. $500 every month) regardless of price. When prices are low you buy more units; when high, fewer. Over time this averages out your entry price and removes the psychological burden of trying to time the market. Particularly effective for volatile assets like Bitcoin or shares.
Wealth Cycles 101 — Get Ready →What to Own
Asset Class
A group of investments that share similar characteristics, behave similarly under market conditions, and are subject to the same laws and regulations. The five main asset classes covered on this platform are: property, shares/ETFs, Bitcoin, gold, and cash. Allocating across multiple classes reduces risk because they don't all fall at the same time.
Asset Classes Explained →Diversification
The practice of spreading investments across multiple uncorrelated assets so a loss in one position doesn't destroy the whole portfolio. True diversification requires assets that don't move in the same direction at the same time — holding 10 tech stocks is not diversification. Adding uncorrelated assets like gold or Bitcoin to a shares portfolio can reduce overall volatility without reducing expected returns.
Diversification Deep Dive →Drawdown
The peak-to-trough percentage decline in an asset's value during a specific period, measuring how much an investor would have lost if they bought at the top and sold at the bottom. A 50% drawdown requires a 100% gain just to break even. Understanding historical maximum drawdowns for each asset class is essential before deciding how much of your portfolio to allocate to it.
Risk vs Reward →Wealth Cycles
M2 Money Supply (Global / Big 4)
The total amount of money in circulation including cash, bank deposits, and near-cash equivalents. The 'Big 4' refers to the combined M2 of the US Federal Reserve, European Central Bank, Bank of Japan, and People's Bank of China — representing ~70–75% of global liquidity (~$98 trillion). When central banks expand M2, more money chases the same assets, historically driving prices higher across Bitcoin, gold, property, and equities.
How We Use M2 Signals →Composite Signal Score
A 0–100 score combining up to 9 weighted factors (Percentile, Asset/M2 Ratio, Trend, Cycle Phase, Cross-Asset Ratio, Sentiment, Liquidity, Drawdown, Price-to-Trend) into a single buy/sell indicator. A score near 0 means multiple independent signals align as historically strong buy conditions; near 100 means historically strong sell conditions. No single factor can trigger an extreme reading — the composite requires broad agreement.
Composite Signal Methodology →Cycle Clock
A visual metaphor (12-hour clock face) that places each asset in its current position within the market cycle. 12 o'clock represents a cycle peak (expensive, momentum waning); 6 o'clock represents a cycle bottom (cheap, early accumulation signal); 3 o'clock and 9 o'clock mark the mid-expansion and mid-contraction phases. The clock helps investors understand whether an asset is early or late in its current cycle.
Cycle Analysis Explained →MVRV Ratio
Market Value to Realised Value. Compares Bitcoin's current market capitalisation (what the market says it's worth today) to its realised capitalisation (what all coins were worth the last time they moved on-chain). An MVRV above 3.5 has historically marked cycle tops; below 1 has historically marked cycle bottoms. It's Bitcoin's equivalent of the Shiller P/E ratio for stocks.
Bitcoin Valuation Signals →CAPE (Cyclically Adjusted P/E)
Also called the Shiller P/E, CAPE divides a stock index's current price by its average inflation-adjusted earnings over the previous 10 years. Smoothing earnings over a decade removes the distortion of one-off recessions or booms, giving a cleaner read on whether equities are cheap or expensive relative to history. The historical US average is ~17; readings above 30 have preceded significant bear markets.
Equity Valuations →Mean Reversion
The tendency for asset prices and valuations to return to their long-term historical averages after periods of extreme overvaluation or undervaluation. It underpins one of Ripper Wealth's two 10-year projection models: when an asset is well above its historical valuation norm, mean reversion predicts below-average future returns; well below, above-average returns. It is a statement about long-run probability, not a short-term prediction.
Projection Methodology →All Ordinaries Index
Australia's oldest share market index, first calculated on 1 January 1980 and covering approximately the largest 500 companies listed on the Australian Securities Exchange (ASX), weighted by market capitalisation. Despite being replaced as the primary benchmark by the S&P/ASX 200 in 2000, the All Ords remains published daily and is the primary AU equity data source between 1980 and 2000.
Data Sources →S&P/ASX 200
Australia's primary share market benchmark, maintained by S&P Dow Jones Indices. It tracks the largest 200 companies on the ASX by float-adjusted market capitalisation, representing approximately 80% of total ASX market cap. The index was launched in April 2000; S&P back-calculated it to November 1992 for historical reference, but those pre-2000 values are a reconstruction, not live data. This distinction matters for historical analysis — charts labelled 'ASX 200' before 2000 are using back-calculated data.
Data Sources →Bitcoin Halving
A pre-programmed event that occurs roughly every four years (every 210,000 blocks) where the reward paid to Bitcoin miners for validating transactions is cut in half. Because halvings reduce the rate of new Bitcoin supply entering circulation, they have historically coincided with bull market cycles in the 12–18 months that follow. The most recent halving occurred in April 2024, reducing the block reward from 6.25 BTC to 3.125 BTC.
Wealth Cycles 101 →Wealth Protection & Tax
CGT Discount
Historically, the ATO allowed individuals who held an asset for 12+ months to reduce their taxable capital gain by 50% (33.3% for super funds). ⚠️ Budget 2026-27 Update: From 1 July 2027, gains accruing after that date are taxed under a new inflation-indexed method (CPI-adjusted cost base + 30% minimum tax) — for ALL CGT assets, regardless of when they were purchased. For assets held before 1 July 2027, the gain is split at the asset's market value at that date: the pre-2027 slice retains the 50% discount; the post-2027 slice uses the new method. New residential builds can choose whichever method gives lower tax at disposal. See the CGT Calculator for a before-and-after comparison.
CGT Calculator (Old vs New) →Inflation Indexation (CGT)
The new CGT method announced in Budget 2026-27 (effective 1 July 2027). Instead of a flat 50% discount, your cost base is adjusted for CPI inflation using ABS 6401.0 data. Only the 'real' gain above inflation is taxable — at a minimum rate of 30%. Applies to gains accruing on or after 1 July 2027 for ALL CGT assets (shares, ETFs, crypto, property — including pre-1985 assets). For assets held before 1 July 2027, the post-2027 cost base is the asset's market value at that date (split via formal valuation or the ATO's average-return apportionment formula). This means investors in high-inflation periods may pay less tax than under the old 50% discount, but investors in low-inflation periods with large nominal gains may pay more.
Budget 2026-27 Full Breakdown →SMSF (Self-Managed Super Fund)
A private superannuation fund that you control and manage yourself, with up to 6 members. SMSFs can hold a broader range of assets than retail super funds — including direct property, unlisted assets, and cryptocurrency — and benefit from the concessional super tax rates (15% contributions tax, 10% CGT with 33% discount). The trade-off is high setup and ongoing compliance costs, making them cost-effective primarily for balances above ~$300,000.
Tax Structures 101 — See It →Negative Gearing
When the income from an investment property (rent) is less than its expenses (mortgage interest, rates, maintenance, depreciation), the shortfall is called a negative gearing loss. Historically in Australia, this loss could be offset against all other income (e.g. salary), reducing your taxable income immediately. ⚠️ Budget 2026-27 Update: From 1 July 2027, for established residential properties purchased after 12 May 2026, losses can only be offset against rental income — not wages. Excess losses carry forward to future years. Properties bought before 12 May 2026 are fully grandfathered. New residential builds retain full deductibility.
Negative Gearing Calculator (Before & After) →Investment Trust Structure
A discretionary (family) trust is a legal structure where a trustee holds assets on behalf of beneficiaries, allowing the trustee to distribute income each year to the beneficiaries in the most tax-effective way. Trusts do not pay tax directly — income is taxed in the hands of beneficiaries at their marginal rates. ⚠️ Budget 2026-27 Update: From 1 July 2028, a 30% minimum tax will apply to discretionary trust distributions. Three years of rollover relief (from 1 July 2027) are available for those who wish to restructure. The traditional income-splitting benefit is being reduced.
Budget 2026-27 Trust Changes →Ready to go deeper?
These terms underpin our cycle-aware research methodology. Learn how we use them together to generate buy/sell signals across Bitcoin, gold, property, and equities.