this post was submitted on 13 Jul 2023
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sir, this is a ~~Wendies~~ meme. In the end it boils down to the capitalist goverments bayling out those who don't need it (billionaires and millionaires) and giving credit for virtually nothing. Ofc it's a simplification since this is a meme, not a chart for econ class
But that’s how capitalism works. You invest your money into something instead of using it on yourself.
And in exchange for the risk taking, because each investment is a huge risk, you become (in case of stocks) a shareholder. And a as a shareholder and risk taker, you get compensated for your risk taking with dividends.
Why invest your own cash into something and take a risk without getting something in exchange? That would be considered stupid.
I invested into Wirecard back then and guess where the money went… Investments are bound to risk. And taking a risk must be rewarded.
I believe that’s how it works, but I just don’t understand how that makes any sense. They’re just playing with numbers in the air, making a line diagraph go up and down… I just don’t get it.
The "line diagraph" represents real physical things that you can eat or sleep in or wear.
So they make the worth of that different? People give money so the worth of those things change? Who decides what worth is? What am I missing?
Well. It’s not that difficult.
You can either invest into materials (oil, Gold, Uranium, Silver,… literally any thing)
Or stocks. Shares of a company.
And of course there are derivates like etf (the only reasonable Derivate). And there is the rest which is basically gambling.
The easiest to understand is Material investments. Let’s take a look into Uranium: Uranium is mined in Uranium Mines. And specialised companies are processing it and storing it. They are basically the vendor to power plants.
Now these vendors allow you to invest in Uranium as well. You can literally buy Uranium and the company selling it to you will store it for you. You receive a certificate of ownership.
Now if you predict, that more and more nuclear plants will be build in the future, this means that there will be higher demand. If you start buying uranium and you refuse to sell it, then supply decreases while demand increases. This means power plant companies will need to offer more money for Uranium. They will need to eventually rise their offer to your price. This means the graph climbs up. Unfortunately there were already many people much earlier having the idea to invest into uranium. So investing now might be too late.
It is basically the same what happened with graphics cards.
Stocks work very similar. But I cannot explain you everything. Eventually you will have to do research yourself. Thanks to the internet, us normal people are empowered to invest in the same way as expert economists would. Just do your research, you will have to read a lot about it. Nothing comes for free. A good start is always YouTube videos. There are some rly good explanations out there. Eventually you will need to start reading further into the subject. Thankfully the internet has tons of stuff about it as well.
Nothing should stop you at this point. Simply start investing 2 hours each week into learning about the stock market and what all the terms mean.
This is of course no financial advice. I just advice you to get some knowledge about the workings of the stock market.
Interesting, you made me understand it better! Not planning on investing though…