RAM or Random Access Memory is the main memory that provides a temporary space to store all electronic data that the CPU needs to perform processes.  It is typically in the form of a module with mounted chips on it and is plugged into a socket on the system’s motherboard.

Virtual memory is a portion of your hard drive that is configured to perform like RAM.  In this case, when there is not enough RAM to hold the active processes, a page fault or swap occurs where excess processes are held in reserve on a fixed disk and brought into operation dynamically.

Since the hard drive is many times slower than RAM, it goes without saying that having to use more virtual memory considerably slows down your processes.  So for optimal system performance, it is sensible to install sufficient RAM so that your computer will minimize or, at best, eliminate the use of virtual memory to handle your processes.