Chapter 3: Index Funds Are The Rational Way To Invest In Stocks

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Chapter 3: Index Funds Are The Rational Way To Invest In Stocks

What is an index fund anyway?

This book is not exactly a “beginners” guide to investing, so I’m going to assume that you are at least somewhat familiar with what an index fund is. But we must have a shared understanding of what an index fund is and why it’s the perfect tool to build passive wealth before we go any further on this journey together. 

Let’s start with some basic terminology. Specifically, two terms are often used interchangeably but are distinctly different. I am talking about index funds and ETFs.