This article has been translated from English to Gen Z Slang.

In the finance and investing game, “yield” is basically the coin your investments make over a certain period. Cha-ching! 💰

This is usually dropped as a percentage of what you originally slipped into the investment or what it’s currently flexing on the market.

It’s basically the vibe check on your investment, usually viewed from an annual angle. 🤑

There are different types of yields, depending on how you’re playing the investment game:

  1. Bond Yield: When it comes to bonds, yield is the glow-up percentage you get paid on the bond’s basic price tag (aka par value). The one everyone’s always chatting about is the current yield, which is the yearly interest divided by the current squad price of the bond. 📈
  2. Dividend Yield: For stocks, the dividend yield is all about those lit annual dividends divided by what the stock’s bringing to the market table. Like, if a company’s annual dividend is $1 and the stock’s at $20, you’re cashing in a 5% dividend vibe. 💸
  3. Yield to Maturity (YTM): This is the total haul you’re gonna grip if you stick with a bond till it’s all grown up. YTM vibes on both what you reel in annually and any glow-ups or flops when the bond finally matures. 🚀
  4. Yield on Cost: This yield? It’s like flexing how well your investment dressed up based on its coat check price.

Bond Yield: The Good Old Faithful

Picture bonds as that solid ride-or-die friend who's got your back no matter what. Always dishing out some cash in appreciation. 🤝

Bond yield is their way of saying “thank you” for trusting them with your dough. It’s the vibe percentage on the bond’s base price. Welcome to “current yield” town! 🔥

Let’s say you snatch up a bond with a street price of $1,000, and it’s dropping a yearly interest (aka coupon) of $50.

That hands you a current yield of 5% ($50/$1,000*100). It ain’t gonna make you a zillionaire, but at least you can afford your Netflix binge! 🎥✨

Dividend Yield: The Gift that Keeps on Giving

Next stock talk time. If bonds are that loyal sqaud member, dividend stocks are like that generous uncle who always rocks up with the best gifts. 🎁

The dividend yield is all about the yearly dividend split by the stock's party price.

If a company throws $2 per year your way and their stock hijacks $40, you’re vibing with a 5% dividend yield. 🎉 ($2/$40*100)

That’s like getting surprise bday gifts on a Tuesday. 🍰 How about having your cake and eating it too?

Yield to Maturity (YTM): The Long Game

Now we’re talking yield to maturity (YTM) – the total Snapchat streak you earn for holding a bond till it’s all the way matured.

Picture it as sticking to your fitness glow-up plan; it’s tough, but you'll defo slim down for summer. 🏋️‍♂️✨

YTM looks at both what you get annually and any coin flips when your bond finally says, “peace out!”

So, if you cop a bond for a cool $900 that’ll flex to $1,000 in 10 years and dishes out $40 annually, your YTM is higher cause there’s also a cheeky $100 glow-up when the bond’s fully mature. Not too shabby, eh? 🤑

Yield on Cost: Keeping Score

Lastly, we got yield on cost, which is low-key keeping tabs on how your investment has slayed over time. 📊

This yield type shows you how your cash ninja skills have progressed from the original buy to now.

If you nab a stock at $10 a pop and it throws you a $1 annual gem, your yield on cost flexes a strong 10%. 💪

But if the stock rockets to $20 and the dividend chills at $1, your dividend yield goes down to 5%. But hey, your yield on cost shines final boss at 10%. 🌟