Tech Storror

  To understand the stock market, first we need to understand just what a stock is. A stock, otherwise known as a share, is a financial token or instrument that signifies ownership of a company in some proportion. Basically, if Amazon had 1000 shares and you bought one share, you would own 1.1 thousandth of Amazon. In reality, Amazon and companies alike have millions of shares. But that sums up the point. When you own a stock, that means that you own a portion of that company and as the value of that company increases so too does your stock price. There are also common and preferred stocks which refer to voting rights of a shareholder. Common stocks have voting rights in, preferred shares don't. When you have voting rights, you can vote on things like board elections, mergers, and other financial decisions. Preferred shares are called that because they get preference when a company pays a dividend, which is basically a split of the profit a company makes with the shareholder, ...

  There are many things that scare people. Ghosts, clowns, the thought that everyone around you secretly dislikes you and is actually actively conspiring to make your life worse, inflation and other things. But let's talk about inflation for a second because everyone in the news likes to talk about how it's the end of the world. And also that weird uncle who says inflation is why you should invest in Doge. Elon Mars talking about how it's going to the moon. And it's definitely not a rug poll, but like inflation doesn't have to be bad. In fact, inflation is good. Economists and financial leaders actually want there to be about 2 to 3% inflation each year. In a healthy economy, lower inflation rates, but rates above 0 actually work to encourage business growth in the economy. Inflation becomes a problem when it runs out of control and devalues everyone's money. But like, how can you take high inflation rates? Often thought to be a major downer and turn them into a...

  You might have heard about the Pandora papers, roughly 12 million leaked documents that reveal corruption and unethical dealings between the wealthy and elite of the world.  Politicians, world leaders, corporate executives, celebrities and more have all been revealed to be hiding vast amounts of wealth in offshore investments to either evade taxes or be used for nefarious purposes. As part of the papers, hundreds of politicians and other individuals around the world have been exposed as hiding wealth from the general public.  So what are the papers? The 12 million documents detail how wealthy individuals across the globe have sheltered money in offshore accounts, real estate and shell companies. While many of these actions aren't inherently illegal, avoiding taxation and hiding assets definitely is. The papers were released by the International Consortium of Investigative Journalists, which is a large group of international media organizations. According to the ICIJ 35 ...

  What is a ceiling? Well, the answer to that is fairly simple. Webster's Dictionary defines it as the overhead inside lining of a room, so that's what a ceiling is?    But, a debt ceiling is different. The debt ceiling is a very different thing, though. It's kind of like an overhead lining, but it's one that protects the entire U.S. economy from total collapse. This is a very important ceiling.  Just like partygoers often raise the roof, occasionally the nation's most lively party goers Congress have to raise the metaphorical roof on the country too. Every so often, the debt ceiling must be raised, or the US risks defaulting on all of its debt. But what does all of this mean? Will I ever stop making bad jokes? The answer to the latter is never, and the prior will take a little bit more explaining. Explain simply the debt ceiling is  a legislative limit on the amount of national debt that can be incurred by the US Treasury. It limits the amount of money the fede...

  The United States is in a lot of debt. Currently the country owes $27.2 trillion. But who would even lend them that much money? Who does the US owe this massive sum?  Well, the answer to that is pretty simple. In large part, it owes itself that money, but there's also quite a few other countries it owes to. the US essentially owes two groups of people, the general public, which can be other countries or even investors in the US and itself. But before we get into who makes up those groups and what the percentages look like, first let's get some basics. Whenever the US government needs money, it raises that money through the issuing of savings bonds or treasury bonds. These bonds are basically pieces of paper that say the US will pay the person or agency that buys it back with a little bit of interest. Many people want to buy bonds because they're pretty solid investments, like banks, foreign governments, and maybe even you. The debt ceiling, which you may have heard about,...

  When one company wants to merge or join forces with another, what exactly does that mean? And when mergers happen for publicly traded companies, what happens to their stocks?  A lot happens when a merger or acquisition occurs, including some employees getting let go, certain divisions being made redundant, or even grander restructuring of business assets. Mergers of companies can be uncertain events, but generally they end up being beneficial for the resulting single company. So why would a merger happen when one company and another company see each other as mutually beneficial? They can both engage in merger talks to form a united company working together with both of their assets under a similar or new name as a new entity. When one company is significantly larger than the other, generally this becomes an acquisition where the larger company offers to buy the smaller company.  When a merger occurs, both companies become a new company together. The stocks of both compa...

  What's the most expensive thing you've ever bought on a credit card? A computer? A piece of furniture? Maybe a car? Chances are, it doesn't even come close to measuring up to the most expensive thing ever purchased on a credit card, probably by a factor of 30,000 or more. Buying things on credit cards can be good if you pay them off and don't pay any interest on that purchase. Most credit cards come with points or rewards,which means buying more expensive things on a card can actually earn you a lot of money back after the purchase. That was the exact motivation of why one billionaire decided to use his credit card for a massive purchase.  Billionaire Liu Yukian purchased a $170.4 million painting by Amedeo Modigliani featuring the female form at a Christie's auction in New York in 2015. He paid for the painting with his American Express Centurion card, which is an exclusive card for high net worth people with no credit limit. Reportedly, Yukian had to get prior a...

  Should you start investing? The answer to that question is complex and unique for every situation, but if you're looking to grow wealth, then the answer is likely some form of yes.  Being a successful investor requires patience. For many that start investing, they jump into stocks like GameStop, AMC, or crypto and expect to be instant millionaires. While that has happened before, that style of investing is dangerous and will likely cause you to lose some money in the long run. Everyone can get lucky once, but should you invest? First You need to figure out if you even have enough money to invest at all before you start dumping money into the stock market, crypto or other accounts. You'll want to evaluate whether you can pay your monthly bills, have an emergency fund of sorts, or have any high interest debt. If you can pay your bills, have a little money saved up for emergencies, and don't have any high interest debt like credit cards, then you should probably start invest...

  If you've been paying attention to the news recently, you might have heard a little word called inflation. Inflation is essentially the devaluing of a currency. While many people have a connotation that inflation is very bad, inflation on its own is actually a necessary part of a functioning economy.  Inflation is the reason things seem to get more expensive overtime, both because goods get more expensive and a dollar goes less far to purchase things. Generally, inflation is expected as a percentage decline in value, and generally the Federal Reserve in the US targets inflation to be at roughly 2% per year, but a variety of factors cause inflation to swing up and down. Defined simply, inflation is the rate at which a value of a currency falls and the price of goods rises. People that own goods or assets generally like inflation because these goods go up in value with inflation. But people holding cash don't like inflation because it decreases the cashes value. Inflation is c...

  Do you want to be a millionaire? Well, you could just try working really hard until you get paid a ton of money. Or you could use compounding interest to exponentially grow your money. But what even is it, and how does it work?  Compound interest is just the principle of getting interest on previous interest. Say you invest $10,000 into a bank. If every month you got a 1% interest payment, after the first month you'd have invested $10,100 into that bank. The next month, the 1% interest would apply to the new $10,100 number, meaning your interest payment would be $101.00, bringing your total invested to 10, 1201 this cycle would continue with interest compounding in your subsequent interest payments getting larger and larger. Essentially compounding interest means the longer you invest in something, the more you get out of that investment exponentially. This can be incredibly useful to transform a little bit of money into a lot over time. So just how powerful is compounding i...

  Elon Musk is bought Twitter for approximately $44 billion, but what does that actually mean? To start, public companies are those that can be traded on public stock exchanges, like the NASDAQ. In Twitter's case, companies go public, usually to raise capital, among a plethora of other reasons. But in the case of Twitter, they went public back in 2013 via an initial public offering or IPO. Now, nine years later, Elon Musk has swooped in and bought the company. But Why would you want to do this? And what happens when a company goes private in the first place?  The process is known as privatization. The most notable change to Twitter will be that the company shares will no longer be listed on a Stock Exchange, meaning that the public will not be freely able to purchase any shares of ownership in the company. The company will still have shares, but they will be held privately, and sale or purchase of them would have to happen in a private transaction. The other major component of...

  This is how the 2008 financial crisis happened. Investment banks were selling something known as mortgage-backed securities. These are basically a bunch of mortgages lumped together. However, investment banks were running out of good mortgages to put into these securities. So they decided to just loosen up their guidelines for what they qualify as a good mortgage so they could keep selling more and more and making more profit off these mortgage-backed securities. But these loans that they were selling that's good are terrible.  Why would someone want to invest in a Walmart cashier's $1,000,000 home loan? Surely they're not going to pay that. The big banks knew that, but they also knew that there was probably safety in numbers. The original mortgage-backed securities, the ones based on conforming loans or good loans that were actually good, are safe because if 20% of people default on their loans, investors in those securities still get a good return.  Not everyone will ...

  Everyone is going to die sometime, but then how do life insurance companies make money?  Life insurance is essentially a contract between the insured and the insurance company that pays out if the policyholder, the insured dies. The life insurance money generally goes to a family member or beneficiary. But how can this be profitable for the insurance company? Everyone dies, after all. Well, it all has to do with how the contracts are set up.  There's generally two types of life insurance, term life and permanent life. Term life covers the insured for a set amount of time, generally somewhere in the range of 15 to 30 year periods. If you die in that period. The policy pays out. If you don't, then you get nothing as you're no longer covered. In this scenario, life insurance makes a little bit more sense as it removes the possibility of every policyholder eventually dying since it's only a given period of time insurance companies can run complicated and sort of morbid mo...

  Cryptocurrency is a digital form of money or currency that can be sent, exchanged and transferred without going through a bank or central system, through a network known as a blockchain. This means that crypto is decentralized, meaning that it doesn't have a central controlling entity that governs it.  But what are blockchains? Essentially, they're a list or a database. Transactions of cryptocurrencies are stored on this list. These transactions are stored in chronological groups known as blocks, hence the name blockchain. Blockchains are also decentralized, meaning that they are managed by a plethora of computers across the world, and the code is all open source, meaning publicly accessible.  But how does this make it secure? Well, since so many computers have access to the same information, it can be quickly and easily verified that the information is accurate by checking with the other copies. In simple terms, blockchains can also only be added to, so there's no goin...

  What if I told you that the entire modern financial system functioned on an infinite money glitch where billions, no trillions of dollars were created out of thin air day after day, and at any point the whole system could collapse? Oh, you. You wouldn't be surprised.    But what I just said was the truth, and it's something called fractional reserve banking, otherwise known as the Infinite Money glitch. Here's how it works.  When someone deposits $1000 in the bank, the bank does not hold on to all of that money. Rather, the bank will just keep 10% a $100 as reserves and then loan out the rest or $900 to other people or companies charging interest on the loan. Making additional money for the bank, the Lendy, or the person that took out the $900 loan then goes on to spend that money. To simplify the scenario, we'll say that that person with a $900 loan immediately paid someone else that $900. At this point, when looking at this small financial system, there's a tota...

  Your brain is about to explode with knowledge. Here are 26 financial terms explained as simply and as quickly as possible.  Balance sheets are just financial statements that total up all debts and all assets. Balance sheets function with a simple equation. Assets equals liabilities plus equity. Liquidity is the principle of how quickly an asset can be converted into cash. Cash is the most liquid asset, usually followed by stocks. The least liquid asset are land and real estate because it can take weeks to months to years to sell. Gap. No, not the store. But generally accepted accounting principles are rules and conventions that govern how a company reports the state of their finances. It's essentially just a standard and companies can report their earnings as gap or non gap.  Capital gains are just the increase in value of an asset above what you paid for it. Capital gains can be realized and unrealized. Unrealized gains mean the asset hasn't been sold in, realized mean...

  The basic concept of insurance is that a company, the insurer, offers a guarantee for a certain risk that may or may not occur. Then another party, the insured, pays the insurer in exchange for protection against that risk. When a bunch of people do the same thing for the same risk, eventually the insurer is getting a lot of income, but the probability of that risk happening is spread out among a bunch of people and stays about the same.  Insurance companies make money by figuring out how much money they need to bring in to turn a profit on a given risk with a given probability. That calculation then influences how much each of the insured pays each month. In general, it's simple math, but in actuality insurance companies have highly complex models for all of this.  Not every insurance company offers the same insurance. Most insurance companies will specialize in their own kind of insurance. This is because each company has to develop a complex model to ensure that they...

  Bear markets are going to have four set phases and you should be familiar with them. Number one is the optimism that transforms into pessimism phase. This is where investors start to feel more and more negative about the future of markets #2. There's usually a sudden stock drop as pessimism and fear takeover. Investors will generally function in a herd mentality, triggering a quick and large sell off to gap downwards.  #3 the period of speculation. This is when stocks have dropped enough speculators and traders hoping to cash in, swoop in and drive up prices of select stocks. Increasing volatility in the markets. #4 the final phase is the slow fade. The final segment is when the rate of sell off slows, eventually declining to flat. And this is when a bottom is put into the market. And after this point stocks begin trading upwards as a trend, establishing the beginning of the next bull market.  One important thing to note about bear markets is that they're not the same a...

   Whether you've been holding since the early days of Bitcoin or recently heard your weird uncle tell you to invest in cryptocurrency, you might be wondering exactly how Bitcoin works. While this newish type of virtual currency has made headline after headline over the last decade, its underlying concepts and function are simpler than you might think.  Let's take a look at the basics. Bitcoin at its core is a software protocol based on the blockchain. The digital token has a value based on what others are willing to pay for it, or simply based on the concept of supply and demand. When it first came out, a Bitcoin was worth about 0.0008 cents, but as more people bought into the idea and bought the coin, the price has now climbed to over 50,000 U.S. dollars. Bitcoin is a digital currency based on a decentralized system that records each transaction on a Ledger, also known as a blockchain. That may sound confusing, but it essentially means that the Bitcoin network isn't run...

  You might have bought a stock or two in your life, but it's less likely that you've traded options or even understand what they are. Stock options are essentially contracts that allow an investor to buy or sell a stock at an agreed upon price. There can be options for most securities, even indexes and ETFs. While on basic definition options sound simple, buying and selling them and the price movement they can have can be a little bit more confusing. You can buy something called a call option which allows you to buy shares of a stock or a security at a later time. Conversely, you can buy something called a put option, which allows you to sell shares of something at a later time. However, buying options doesn't mean that you have to own the underlying company or security like buying stocks do. Rather, owning options contracts means that you have a chance to eventually own the security, but you don't have to. It's an option. One of the better ways to think about opti...

  What's the fastest way that you can make $1 billion? Well, you could inherit it. Yep, I think that's the fastest way. Wait, wait, wait. While that's the real answer to the question, that's What you're probably after is the answer to the fastest way that you can make $1 billion. That answer is far more complicated, and the truth of the matter is that it's likely impossible. The easiest answer to how you could make $1 billion other than inheriting it is simply winning it. In 2016, the Powerball jackpot in the US was $1.586 billion.  That's the largest lottery jackpot ever, and while current lottery jackpots are just a fraction of that, it's likely that it will be beaten by a future lottery at some point in time. Now, even with a lottery jackpot that large, the prize had to be split between three different people, and with three winners, each took away 533 million before taxes. Even winning the largest jackpot in history isn't enough to make you a bil...

  Can you see the future? Well, boy, do we have the perfect investment for you Futures contracts? When you buy a stock, you instantly own that stock for the price you paid. When you buy a future, you're buying an agreement that states that you will buy or sell an asset at a certain price at a certain time in the future. The benefit to this is that the futures contract stands regardless of how the price of the underlying stock or asset fluctuates. It essentially guarantees you a rate to buy something down the line regardless of market fluctuations along the way. So what can you buy futures contracts on? Anything from physical commodities like oil, or even financial instruments like stocks or indexes. Futures contracts are standardized to facilitate easy trading on something called a futures exchange. And there's a variety of reasons investors might buy a future, like hedging their bets or speculating on markets. So in summary, futures are contracts that obligate buyers or selle...

  Bankruptcy. It's a term you've probably heard before, either from playing a not so friendly game of Monopoly or from watching the news. Chances are some of the people watching this will also go through some form of bankruptcy in their life. That said, bankruptcy is a little bit more complicated. Bankruptcy. You can't just declare bankruptcy. Rather, it's a legal process that is overseen by bankruptcy courts. The process is designed to help people and businesses eliminate part or all of their debt and repay what they owe where needed. Bankruptcy can get you relief from your debt, but it's a pretty serious process and can have impacts on your ability to make and spend money for up to 10 years. Let's go through the basics of bankruptcy in the United States to understand just what this means. Bankruptcy is a fairly complex process, and it requires the average person or company to work with bankruptcy attorneys to make sure it goes smoothly. There are rules and reg...

  ATM machines are some of the most useful technologies today, and perhaps one of the most prominent that connects our digital world to the physical one. By simply putting in your card, you can instantly get cold hard cash from your bank account. But how is that even possible? We've all used an ATM. After you input your card into an ATM and you input your pin to ensure proper security measures, then you're met with prompts for how and how much money you want to extract once the entire process is approved by the bank. you get your money out. In essence, an ATM machine is a computer that has a mechanical dispenser for cash. Notably, the computer is connected to a secure network that can link up and validate information with your bank account. So what all goes into this giant computer that dispenses cash? The major parts are the main board, the processor of the ATM that houses the CPU memory, and connects all of the other ATM parts together. Then there's the card reader, the d...

  Credit cards are one of the most important financial tools you have at your disposal. They can either make your financial life or break it. If you know how to work the system and pay off credit cards each month, certain cards can actually make you money when you spend with them. All of that sounds a little weird though when you start to think about it. How can a company offer you, say $500.00 when you sign up for the card and spend money? Or how can a credit card company give you 2% cash back on all purchases? Obviously the money has to be coming from somewhere. So how are banks getting all that cash to keep up with those rewards? There's actually three different ways credit card companies bring in revenue from three sources, interest, fees and interchange fees. Interest and often fees are pretty standard on credit cards. If you use a credit card and don't pay off the full balance by the due date, the issuer will start to charge interest on the money leftover, usually somethi...

  Money is arguably one of the most important things in the world. While happiness and joy might outrank it at least on your uplifting Instagram feed, money does seem to make things easier. When you actually stop and think about paper money, though, we're left with a perplexing conundrum. There's nothing inherently valuable about these banknotes, at least today. So why does money have any value at all? Over time? How paper money is valued has actually changed, so to understand how modern money is worth anything. First, we have to look back to the early days of paper money. In the early days of governmental currency, money wasn't paper. Rather, it was usually a coin made of a precious metal like gold or silver. The value of that money was intrinsic as the value of the metal that made it up. If you melted a gold coin down, you'd have the same amount of gold as the coin was worth. As this system of money became impractical, governments decided to come up with a new way of ...