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Permanent Loss
Money that is not recovered because something fails, becomes worthless, or is sold for less and never bought back.
Example
Mika pays $100 for one company's shares. The company closes and nothing remains for its owners. The missing $100 does not return when other prices rise.
How it fits in
A temporary price fall and a permanent loss are not the same. Selling during a fall can turn a temporary decline into a realised loss, while business failure or default can make recovery impossible. A long time horizon may give a sound holding time to recover, but time cannot rescue every company, borrower, or purchase price.
Where this is taught
Related terms
When the money you earn from saving starts earning its own money on top.
Interest paid only on the original amount, never on the interest you have already earned.
Needs are the things that keep you safe and well. Wants make life nicer. Mixing them up is what empties most budgets.