Part 2/10:
Laddering involves dividing a lump sum of money into smaller parts, each maturing or paying out at different intervals. For example, instead of investing everything at once, an investor might split $1,000 into multiple smaller investments, each scheduled to mature across several months. This staggered approach ensures that, at any given time, some portion of the investments provides cash flows, effectively smoothing income over a specified period, typically around a year.