Knowledge Base.
Short, structured articles covering the fundamentals of investing, behavioural economics, and sustainable money management.
Investing can feel like walking into a conversation that started before you arrived. The jargon, the assumptions, the sheer volume of opinions. It is easy to feel like everyone else already knows something you do not.
There is a reason the same mistakes keep appearing. It is not because people are careless or uninformed. It is because certain ideas feel true, even when the evidence says otherwise. The myths that trip up new investors are not random. They follow pa...
Before putting money into markets, it helps to understand what kind of game you are entering. Not the details of products or strategies, but the basic rules of how markets behave over time. These are not predictions. They are patterns that have held...
Learning about investing is not like learning most things. The stakes are real, the feedback is delayed, and the temptation to skip ahead is strong. This article explains how the learning paths on Illuminvest are structured, why they are sequenced th...
Most investing mistakes happen not because people lack knowledge, but because they lack a plan. When markets move, when headlines shout, when friends share stories of gains or losses, having a written set of rules creates an anchor.
An emergency buffer (sometimes called an emergency fund or cash runway) is a pool of accessible savings set aside to cover essential expenses during unexpected disruptions. The term "runway" refers to how long someone could sustain their essential co...
Debt is not inherently good or bad. It is a tool with costs attached. The question is not whether debt exists, but what it costs, and how that cost compares to the alternatives. This article explains why interest rate is the central variable in think...
A cashflow system refers to the structure used to direct income toward spending, saving, and obligations over time. Managing money is often framed as a discipline problem. The assumption is that people who fail to save simply lack willpower or financ...
There is a difference between losing money and losing everything. Most investing discussions focus on returns, volatility, and allocation. These matter. But they matter less than avoiding ruin. Ruin is what happens when a low-probability event wipes...
Investing is the act of putting money to work with the expectation of receiving more back in the future. That is the entire concept in one sentence. Everything else is detail. This article explains the basic mechanics: what you are doing when you inv...
These three words are often used interchangeably, but they describe different things. Confusing them leads to poor decisions. Understanding them leads to calmer ones. This article explains the distinctions: volatility as normal movement, risk as the...
How compounding works, why contribution rate and time dominate investment outcomes, and how fees act as compounding in reverse. The maths is simple; the behaviour is not.
A savings account that pays 3% interest sounds like it is earning money. If inflation is running at 4%, it is not. The number in the account is rising, but what that number can buy is falling. This is the difference between nominal returns (the numbe...
What diversification actually does, what it cannot do, and why the instinct to concentrate is persistent despite evidence against it. Diversification removes the possibility of ruin from a single mistake.
Markets fall. This is not a warning or a prediction. It is a description of how markets have always worked. Understanding why markets decline does not help you avoid them. No one can reliably predict when falls will happen or how deep they will go. B...
When people talk about how much risk they can handle, they usually mean one thing. But there are actually two distinct questions, and confusing them leads to predictable problems. The first question is psychological: how much volatility can you watch...
A $10,000 loss and a $10,000 gain are mathematically equivalent. They are not psychologically equivalent. The loss feels worse. Much worse. This asymmetry is called loss aversion, and it is one of the most robust findings in behavioural economics. It...
There is a question that sounds simple but changes everything: what is this money for? Most investment discussions skip this question. They jump straight to returns, asset classes, and performance charts. But returns without purpose are just numbers....
Before choosing investments, it helps to understand what you are actually buying. The term "asset class" refers to a category of investments that share similar characteristics, behave in broadly similar ways, and play a particular role in a portfolio...
A portfolio does not stay where you put it. Over time, different assets grow at different rates, and the original allocation drifts. What started as 60% shares and 40% bonds might become 70% shares and 30% bonds after a strong equity market.
The debate between passive and active investing is often presented as settled: passive wins. This framing is too simple. While evidence strongly favours passive approaches in many contexts, the choice involves genuine trade-offs that depend on indivi...
Nobody gets excited about tax. But here is the thing: the investors who understand how capital gains tax works tend to make fewer costly mistakes than those who learn about it after selling. Tax is not the enemy. Surprise is.
Australian investors often hear that franking credits are "a good thing" without fully understanding what they are or why they exist. The term sounds technical. The mechanics seem arcane. Many people collect franked dividends for years without ever r...
Choosing a broker is one of the first practical decisions an investor makes. It is also one that many people rush through, selecting based on an advertisement, a friend's recommendation, or whichever platform appears first in search results.
Clicking "buy" feels instantaneous. You enter an amount, confirm the order, and shares appear in your account. The simplicity is deceptive. Between your click and the completed trade lies a system of order types, matching engines, and execution rules...
Your brokerage account is not like your social media account. If someone gains access, they are not posting embarrassing photos. They are potentially draining your life savings. Investment accounts are high-value targets. They contain liquid assets t...
A 1% difference in fees does not feel significant. It is one dollar out of a hundred. In the context of a $10,000 investment, that is $100 per year. Noticeable, perhaps, but hardly decisive. Over twenty or thirty years, that same 1% becomes something...
The fees you know about are the ones you can manage. The fees you do not know about erode returns silently, appearing nowhere in the headline numbers but showing up in every outcome. Investment costs extend beyond the management fees and brokerage th...
Someone online is very excited about a stock. They have done "deep research." The company is about to announce something big. The price is going to explode. You need to get in now, before everyone else finds out.
Finfluencers are everywhere. They share portfolios, recommend strategies, post returns, and offer opinions on markets with the confidence of seasoned professionals. Some have millions of followers. Some have credentials. Some have neither.
Scammers are not creative. They use the same scripts, recycled and refined, because the scripts work. The details change (names, platforms, current events) but the underlying structure remains constant.
Markets fall. They always have, and they will again. The question is not whether you will experience a downturn, but how you will respond when it arrives. Most investors know, intellectually, that downturns are temporary. Most investors also know, fr...
A good investment plan is designed to work over years, not days. Yet the temptation to tinker is constant. Markets move, news breaks, and the plan that felt right six months ago can suddenly feel inadequate.
Plain English definitions of investing terms with Australian context. Learn what ASX, ETF, franking credits, CGT, CHESS, MER, and other terms mean.
Common questions about investing in Australia answered with clear, process-based explanations. Learn about market volatility, when to start investing, avoiding scams, and more.
Illuminvest provides general educational information only and does not provide personal financial advice. The content on this site is not intended to be a substitute for professional financial advice.