Understanding Money

Understanding Money is Harder Than You Think

If you are going to have enough money to live off, save and invest. You first must understand money and how it works. It is not difficult to understand money, but it does take time and attention to learn the process. You need to do a lot of reading, research, take courses, and develop an understanding of all the nuances of money.

How Does Money Work?

If you do not have much money, you may need to ask yourself, “how does money work? “How do I prioritize money issues?” It sounds so simple, just make money, and spend money the right way. But spending money the right way has proven elusive to many intelligent people.

There are those who make a lot and end up with nothing. There are those who start with little, make a lot, then end with billions. What is the difference? The latter have figured out, “how money works” by understanding money and all it entangles.

Spending Money the Right Way Has Proven Elusive to Many.

From Garage Poverty to Billionaire

We hear unlimited cases about how billionaire companies all started in a garage. Well, that is more like billionaire propaganda than reality. The way they start is usually when they have access to other billionaires or multi-millionaires giving away money through their venture capital companies.

Venture Capitalists fund businesses they think will grow and be successful, but they also must like you to give you their money. Some startups get millions of dollars of funding through a simple business plan and likable personality.

If the idea was incredibly good, and the management great, then they get more venture capital funding. Later, it comes from a private company with constant venture capital funding to a public company that is funded through national and international investors. Then, the founders go from rich to richer. That is the so-called garage model.

Who Get's Venture Capital Funding?

Very few have access to the venture capital garage model. The people who get the funding, get in early, get rich as the stock price goes from two dollars a share to 3000 dollars a share, as in Amazon.

You may not get in when the stock price is low, but once the company has been established, when you understand stocks, you can get in when the price is reasonable, the company is stable, and ride it up with the rich people. That takes knowledge. Understanding money is crucial to learning stocks, bonds and then on to mutual funds for easier investing.

Accomplishing Real Financial Growth Requires the Ability to Save and Invest

Who Got Rich With Venture Capital Funding?

There are many examples of people who started with little but took the ride up to wealth with venture capital funding. Some examples are Bill Gates-Microsoft, Google Founders, Apple Founders, Facebook founders, different Biotech Founders, Jeff Bezos and millions of other successful founders. Jeff Bezos learned how venture capital funding worked when he worked as an investment banker on wall street. It is not complicated when you work in the industry. 

I once heard Mark Zuckerburg say facebook was his 3rd or 4th company he tried before success. I don’t know how true that is, but if he got venture capital funding, and I am sure he did, that is a lot of wasted money. A series of failed businesses is one sure way to understanding money and how it works. 

Many were not successful, but because they have venture capital instead of a small business loan, they were able to just walk away from their failed companies. Those we see in business are the successful ones that made it. I have invested in several stocks, and my experience has been a good experience. 

Many of the Wealthiest People in the World Gained Wealth From the Stock Market,     -Lois

Stocks, Bonds and Mutual Funds

Stocks and bonds are an advanced form of investing. You better know what you are doing before you get involved. Read a lot, study a lot, and then follow the markets and the experts. There are no hot stock tips.

Mutual funds are much easier than individual stocks to invest in. Stock Mutual Funds are baskets of stocks, Bond Mutual Funds are baskets of bonds. These funds are professionally managed and easy to monitor through the research reports. Understanding money is easy with the study of mutual funds.