What is investing, and how is it different from saving?
Investing is putting money into assets that may grow over time, in exchange for accepting that their value can fall. Here is how it differs from saving, with numbers.
Read the noteInvesting, explained one note at a time.
Short, sourced notes for complete beginners — stocks, funds, bonds, risk, the economy and crypto tokens. Read them in order, or jump to a topic. Every number links to its primary source.
What is a stock, and what do you actually own when you buy one?
A share of stock is a small slice of a company. Here is what that slice gives you, the two ways it can pay off, and why you can lose money.
Read the noteWhat is a mutual fund, and how does buying one actually work?
A mutual fund pools many people's money into one portfolio run by a registered adviser. Here is how the price is set, what you pay and what can go wrong.
Read the noteWhat is a bond, and how does lending money to an issuer actually work?
A bond is an IOU: you lend money, the issuer pays interest and returns the principal on a set date. Here is how the cash flows work and what can go wrong.
Read the noteWhat is diversification, and how does it lower investment risk?
Diversification means not letting one investment decide your fate. Here is the arithmetic of spreading money out, the two levels regulators describe, and the limits nobody should skip.
Read the noteWhat is loss aversion, and how does it change the way people invest?
A loss tends to weigh on us more than a gain of the same size. That tilt can lead investors to sell in a panic, hold losers too long or keep too much in cash.
Read the noteHow does the Federal Reserve set interest rates?
The Fed sets a target range for one overnight rate between banks, then uses tools such as the rate it pays on bank reserves to keep it there. Other rates follow, loosely and with a lag.
Read the noteWhat is a crypto token, and what do you actually own when you hold one?
A token is an entry on a shared digital ledger, controlled by a secret key. Here is what the main types are, what holding one really means, and why prices swing so hard.
Read the noteHow does compound interest work, and why does time matter so much?
Compound interest is interest earned on interest. In year one it looks tiny; after a few decades it can be most of the balance. Here is the arithmetic, step by step.
Read the noteHow do stock exchanges work, and what happens after you press buy?
An exchange is a marketplace that matches buyers and sellers. Here is how prices are quoted, where your broker sends your order, and what happens after the trade.
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