Imagine a group of friends trying to manage a shared expense listType #1Type #2

A Simple Explanation

Traditionally, one friend (the "central authority") would keep track of all the expenses. Everyone trusts this friend to maintain accurate records. But, what if that friend loses the list, or makes a mistake? The whole group is affected.

Type #1.Centralized System

In a decentralized system, every friend has a copy of the expense list. When someone adds an expense, they share it with everyone. Each friend verifies the new expense and adds it to their copy.

Type #2.Decentralized System

No single point of failure:** If one friend's copy is lost or corrupted, the others can still access the correct information.

Key points

Everyone can see the entire expense list, ensuring fairness and accountability.

Transparency

Changing the list is difficult because everyone must agree on the changes.

Security

It uses cryptography to secure the data and ensure trust among participants.In essence, a decentralized system is like a shared digital ledger where everyone has a copy and can verify the information

Blockchain To

crypto

Cryptocurrency

moneyandinvestments

Money & Investments

technologyandthefuture

Technology & The Future

education

Learning & Education

entrepreneurship

Entrepreneurship

Decentralized System: 

You can save just for saving sake and indeed you should every one should.

Save

Everybit of savings is like taking a point in the future that would have been owned by someone else and giving it back to yourself.

The first Idea simple but easy to overlook is that building wealth has little to do with your income or investment returns and lots to do with your savings rate.

Psychology of Money

Picture a diary, but instead of paper, it's a digital file. And instead of you being the sole keeper, it's shared with a bunch of friends. Every day, you write a new entry. Each entry is a "block" in this digital diary.

1 magine a digital diary

ow, here's the magic: once a block is written, it can't be changed. And each new entry (block) is linked to the previous one, forming a chain. This chain is incredibly hard to break.

A chain of trust

This digital diary is stored on multiple computers, not just yours. So, everyone has a copy. If someone tries to change an old entry, it won't match the copies on other computers. This makes it impossible to cheat.

Everyone's a keeper

Because the diary is shared, there's no single boss or authority. It's a community effort. This is called decentralization. It means no one person or group controls the entire system.

The power of decentralization

So, what's the big deal? This technology, called blockchain, is revolutionizing how we handle everything from money to contracts. No more middlemen, no more trust issues. It's like having a super-secure, transparent, and democratic system for managing information.

Real-world magic

**In essence, blockchain is a digital record-keeping system that is secure, transparent, and resistant to modification.** Would you like to know more about specific applications of blockchain?

books

Books

Blockchain Unravel

Measures the percentage increase in a company’s sales over a given period. This indicator reveals how well a company’s products or services are performing in the market and the effectiveness of its sales and marketing strategies.Example: A company’s revenue increased from $1 million in 2022 to $1.2 million in 2023. The revenue growth rate would be calculated as (($1.2 million - $1 million) / $1 million) × 100 = 20%.

1. Revenue Growth

Calculates the percentage of total revenue that remains as profit after all expenses, including operating costs, taxes, and interest, are deducted. A higher margin indicates a more profitable company, reflecting efficient cost management and strong revenue generation.Example: A company has $500,000 in revenue and $100,000 in net income after all expenses. The net profit margin would be ($100,000 / $500,000) × 100 = 20%.

2. Net Profit Margin

Represents the percentage of revenue left after subtracting the cost of goods sold (COGS). This metric focuses on the core profitability of a company’s products or services before accounting for other operational expenses, helping assess pricing strategies and production efficiency.Example: A company’s revenue is $300,000, and the cost of goods sold (COGS) is $180,000. The gross profit margin is ((($300,000 - $180,000) / $300,000) × 100) = 40%.

3. Gross Profit Margin

Measures how effectively a company uses its assets to generate profit. It’s calculated by dividing net income by total assets. A higher ROA indicates more efficient use of assets in generating earnings.Example: A company has a net income of $50,000 and total assets of $500,000. The ROA would be ($50,000 / $500,000) × 100 = 10%.

4. Return on Assets (ROA)

Assesses the return on shareholders' equity, reflecting how well a company generates profit from its shareholders’ investments. It’s calculated by dividing net income by shareholder equity. A higher ROE suggests effective management and strong financial performance.Example: A company has a net income of $75,000 and shareholder equity of $300,000. The ROE would be ($75,000 / $300,000) × 100 = 25%.

5. Return on Equity (ROE)

Evaluates a company’s ability to meet short-term obligations with its short-term assets. Calculated by dividing current assets by current liabilities, this ratio helps gauge liquidity and short-term financial health.Example: A company has $200,000 in current assets and $150,000 in current liabilities. The current ratio would be $200,000 / $150,000 = 1.33.

6. Current Ratio

A more stringent measure of liquidity than the current ratio, it excludes inventory from current assets. Calculated by dividing (current assets - inventory) by current liabilities, it provides insight into a company’s ability to meet short-term obligations without relying on inventory sales.Example: A company has $200,000 in current assets, $50,000 in inventory, and $150,000 in current liabilities. The quick ratio would be ($200,000 - $50,000) / $150,000 = 1.00.

7. Quick Ratio

Indicates the proportion of a company’s funding that comes from debt compared to equity. Calculated by dividing total liabilities by shareholder equity, this ratio reveals financial leverage and risk. A higher ratio suggests greater reliance on debt.Example: A company has $400,000 in total liabilities and $200,000 in shareholder equity. The debt-to-equity ratio would be $400,000 / $200,000 = 2.0, indicating the company uses twice as much debt as equity.

8. Debt-to-Equity Ratio

Provides a snapshot of a company’s operational profitability by excluding interest, taxes, depreciation, and amortization. It helps assess core business performance and compare profitability across companies.Example: A company has $120,000 in revenue, $40,000 in operating expenses (excluding interest, taxes, depreciation, and amortization). EBITDA would be $120,000 - $40,000 = $80,000.

9. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

Measures the cash generated or used by a company’s core operational activities. This indicator reflects the company’s ability to generate sufficient cash to sustain and grow its business operations without relying on external financing.Example: A company reports $30,000 in net income, but adjusts for $5,000 in depreciation and $3,000 in changes in working capital. The cash flow from operating activities is $30,000 + $5,000 + $3,000 = $38,000.

10. Cash Flow from Operating Activities

Discover the world of business and economics.

economics

Economics

business

Business

The Top 10 Financial Performance Indicators You Should Know

Real passive income is something that doesn't require time every day. You can publish something and get money without buying traffic for the whole time or additional promotion.

What Is Passive Income

Etsy promotes good authors, helps them to grow, and collects money. It's one of the best ways to make passive income.BUt you should be professional and outstanding to be noticed

1. Sell Printables on Etsy

People who don't want to build an audience on social media can certainly go for selling on KDP. With good research of products and keywords, you can expect passive income

2. Sell ebooks on KDP

It's a marketplace for creators based on organic traffic. You don't need to promote your product.

3. Sell designs on Creative Fabrica

How you can earn money passively by creating media products

I often discuss making money selling Notion templates on Gumroad. However, to achieve consistent sales, you must promote your product regularly there. Etsy tops when it comes to passive income. After…

marketingandsales

Marketing & Sales

product

Product & Design

3 Ways for creators to Make Real Passive Income 

Kakeibo is a financial recording method that helps you save money and plan expenses more wisely. With Kakeibo, you are invited to:- 📒 Record expenses- 🖋️ Prepare a budg- 📊 Evaluate monthly finances

Get to Know Kakeibo - The Japanese Art of Managing Finances

1. Determine Regular Income and Expenses: Identify your regular sources of income and expenses.2. Plan Monthly Expenses: Create a budget for daily needs, entertainment and savings.3. Record Daily Expenses: Write down all your expenses to know your spending pattern.4. Monthly Evaluation: Analyze and evaluate at the end of every month to find out which areas need improvement.

Practical Steps for Kakeibo

- Financial Awareness: Be more aware of your spending habits.- Better Control: Control expenses and avoid waste.- Achieve Financial Goals: Helps you save for the future and achieve your financial goals faster

Benefits of Kakeibo

Make your financial life more organized and economical with the book "Kakeibo: The Japanese Art of Financial Smartness So You Don't Waste Your Money" by AE Zen. Find practical tips and tricks for managing your Finances.

Want to Master Kakeibo?

This book discusses practical ways to record expenses and income, as well as reflect on spending habits to achieve financial balance.

personaldevelopment

Personal Development

writing

Reading & Writing

Kakeibo: The Japanese Art of Financial Intelligence So You Don't Waste Your Money by AE Zen

Compound interest is when you earn interest on both your original investment and the interest that has already been added. This means your investment grows faster over time compared to simple interest, which only earns interest on the initial amount.

What is Compound Interest?

Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.

<ul><li class="ql-align-justify">Initial Principal: The original amount of money invested or borrowed.</li><li class="ql-align-justify">Interest Rate: The percentage at which the investment grows each period.</li><li class="ql-align-justify">Compounding Frequency: How often the interest is applied to the principal (e.g., annually, semi-annually, quarterly, monthly).</li><li class="ql-align-justify">Time: The duration for which the money is invested or borrowed</li></ul>

How Compound Interest Works

<ul><li>A = the future value of the investment/loan, including interest</li><li>P = the principal investment amount (initial deposit or loan amount)</li><li>r = the annual interest rate (decimal)</li><li>n = the number of times that interest is compounded per year</li><li class="ql-align-justify">t = the number of years the money is invested or borrowed for</li></ul>

Formula for Compound Interest

By starting early, making consistent contributions, and reinvesting earnings, you can significantly enhance your wealth over time. Let's explore these strategies in detail to help you maximize the benefits of compound interest.

Essential Strategies for Maximizing Compound Interest

One effective approach to understanding compound interest is the Rule of 72, a quick guide to estimating investment growth. The formula is simple: divide 72 by the annual interest rate to determine the number of years it will take for your investment to double. For example, with an 8% return, it would take approximately 9 years for your investment to double (72 ÷ 8 = 9).

1. The Rule of 72 - Your Quick Doubling Guide

Starting early is another vital strategy, as it allows your investments more time to grow exponentially. Comparing the growth of investments made at different ages highlights the significant benefits of early investing. The earlier you start, the more you can take advantage of compounding over a longer period.

2. Start Early - The Key to Exponential Growth

Consistent contributions are equally important in maximizing compound interest. Regularly adding to your investment can steadily build wealth over time. For instance, the substantial impact of monthly contributions shows how regular investments can significantly enhance your overall returns.

3. Consistent Contributions - Building Wealth Steadily

Reinvesting earnings is crucial for maximizing returns. By compounding through reinvestment, the growth potential of your investment increases. This strategy is evident in the enhanced growth of investments where dividends and interest are reinvested rather than withdrawn, leading to significantly higher returns over time.

4. Reinvestment of Earnings - Maximizing Returns

<ol><li class="ql-align-justify">Automate Your Investments</li><li class="ql-align-justify">Choose High-Interest Accounts</li><li class="ql-align-justify">Minimize Fees and Expenses</li><li class="ql-align-justify">Reinvest Dividends and Earnings</li><li class="ql-align-justify">Stay Invested for the Long Term</li></ol>

Practical Steps to Leverage Compound Interest

motivationandinspiration

Motivation & Inspiration

strategy

Strategy

How to Grow (Explosive) Wealth Over Time 

"I can't afford it." "Study hard so you can find a good company to work for." "When it comes to money play it safe. Don't take risks.""Our home is our largest investment and our greatest asset"

"How can I afford it?""Study hard so you can find a goodcompany to buy. When it comes to money, learn to manage risks.""Our home is a liability and if our house is our largest investment we're in trouble.

<ol><li>The Rich Don’t Work For Money</li><li>Why Teach Financial Literacy</li><li>Mind Your Own Business</li><li>Taxes And Cooperation</li><li>The Rich Invent Money</li><li>Work To Learn , Not For Money</li></ol><a href="https://elevatedpath.beehiiv.com/subscribe">The Art of Habits</a> (Its Free)

6 LESSONS FROM RICH DAD

The poor and middle class works for money, the rich have money work for them🐀 The Rat Race The pattern of get up, go to work, pay bills, go to work, pay bills. Offer them more money and they continue the cycle by increasing their spending"Those with IMAGINATIONS thrive while those without it are still looking for a job.""Keep using your brain, work for free, and soon your mind will show you ways of making money far beyond."People's lives are forever controlled by 2 emotions:😨FEAR & 🤤GREED"Fear pushes you out of the door, and greed calls to you. Thats the trap."

1. The Rich Don’t Work For Money

💰 It's not how much money you make, It's how much money you keeps ASSETS × LIABILITIESAssets put money in your pocketsLiabilities takes money out of Your PocketsYou must know the difference between assets and liabilities, and buy assets.

2. Why Teach Financial Literacy

The rich focus on their asset columns while everyone else focuses on their income statements"I'm not in the hamburger business, My business is real estate. Ray Kroc"<ul><li>The reason so many talented people are poor is because they focus on building a better hamburger and know little to nothing about business systems.</li><li>The mistake in becoming what you study is that too many people forget to mind their own business. They spend their time minding someone's business and making that person rich.</li></ul>

3. Mind Your Own Business

My rich dad just played the game smart and he did it through corporations.The biggest bully was not the boss or the supervisor, but the tax manCorporations have tax advantages and protection from lawsuits.﻿Business owner with corporations :<ol><li>Earn</li><li>Spend</li><li>Pay Taxes</li></ol>Employees:<ol><li>Earn </li><li>Pay Taxes</li><li>Spend</li></ol>

4. Taxes And Cooperation

Often in the real world, it's not the smart who get ahead, but the bold."The main reason most people are not rich is because they are terrified of losing."Great opportunities are not seen with your eyes, they are seen with with your mind.3 skills you need to develop: <ol><li>Find an opportunity that everyone else missed. </li><li>Raise money. </li><li>Organize smart people</li></ol>

5. The Rich Invent Money

<ul><li>In the workplace, in order to make more money, you need to specialize. But to be rich, you need to do exactly the opposite</li><li>Education is more valuable than money, in the long run.</li></ul>Management Skills You Need :<ol><li>Management Of Cashflow</li><li> Management of Systems </li><li>Management of Peoples </li></ol>Specialized Skills You Need :<ol><li>Sales & Marketing </li><li>Speaking & Negotiation </li><li>How to be a good Teacher</li></ol>

6. Work To Learn Not For Money

<ol><li>Find a Strong Purpose </li><li>Make Daily Chooses </li><li>Choose Friends Carefully </li><li>Learn Things Quickly </li><li>Pay Yourself First</li><li>Pay Your Brokers Well</li><li>Be an Indian Giver</li><li>Use Assets to Buy Luxuries </li><li>Choose Your Heros</li><li>Teach and You Shall Receive </li></ol>

10 Steps To Awaken Your⁷ Financial Genius

Read This and it will challenges your conventional wisdom about money and wealth-building. 

Although we have been successful in our careers, they have not turned out quite as we expected. We both have changed positions several times-for all the right reasons-but there are no pension plans vesting on our behalf. Our retirement funds are growing only through our individual contributions. Michael and I have a wonderful marriage with three great children. As I write this, two are in college and one is just beginning high school. We have spent a fortune making sure our children have received the best education available. One day in 1996, one of my children came home disillusioned with school. He was bored and tired of studying. “Why should I put time into studying subjects I will never use in real life?” he protested. Without thinking, I responded, “Because if you don't get good grades, you won't get into college.” “Regardless of whether I go to college,” he replied, “I'm going to be rich.”

Kiyosaki is best known for his book Rich Dad, Poor Dad, the #1 New York Times bestseller. Kiyosaki followed with Rich Dad's CASHFLOW Quadrant and Rich Dad's Guide to Investing.

Robert T. Kiyosaki

Rich Dad, Poor Dad

Pay Yourself First: Save at least 10% of your income to build wealth.

Invest Wisely: Seek advice from knowledgeable individuals before investing.

Avoid Debt: Live within your means and avoid borrowing excessively.

Make Your Money Multiply: Put your savings to work through investments.

Guard Your Treasures from Loss: Invest cautiously and diversify to mitigate risks.

Own Your Own Home: Owning property provides security and a sense of accomplishment.

Ensure a Future Income: Plan for retirement and future financial security.

Increase Your Ability to Earn: Continuously improve your skills and seek opportunities.

Seek Advice from Those Who Are Successful: Learn from those who have achieved financial success.

Make Decisions Promptly and Act: Procrastination leads to missed opportunities.

Control Your Expenditures: Budget wisely and prioritize essential expenses.

Make Your Gold Work for You: Invest in assets that generate passive income.

Increase Your Earnings Power: Build multiple streams of income.

Make Good Use of Your Time: Invest time in activities that contribute to your goals.

Learn and Grow: Continuously educate yourself about money and investments.

Discover timeless wisdom on wealth and success in "The Richest Man in Babylon." Learn key principles to build and manage your finances effectively.

philosophy

Philosophy

history

History

15 Timeless Lessons from The Richest Man in Babylon

People tend to place a higher value on products they partially assemble themselves (such as IKEA furniture.) i definitely experience this effect with legos I’ve built

The IKEA Effect

During economic downturns, sales of small luxury items like lipstick tend to increase as consumers seek affordable indulgences.

The Lipstick Effect

This test gave children to option to eat a single marshmallow or wait a set time and receive extra, testing their ability to withdraw from instant gratification. This psychological experiment showed that children who could delay gratification (wait for a larger reward) tended to have better life outcomes, including higher incomes. (Results are still being disputed)

The Marshmallow Test

This economic principle states that as a person consumes more of a good or service, the additional satisfaction (utility) from each additional unit decreases.

The Law Of Diminishing Marginal Utility

The broken window fallacy is a misconception that a destructive event, such as breaking a window, has positive economic effects because it creates job opportunities for those who fix it. In reality, it only causes a redirection of resources away from productive activities.👉 Destruction does not create wealth. 👉 The resources used to repair the window could have been invested in more beneficial activities, ultimately leading to economic growth and job creation. 👉 Remember, every decision has an opportunity cost. Don't fall for this fallacy and always consider the bigger picture!

The Broken Window Fallacy

Named after economist Ronald Coase, this theorem states that under certain conditions, private parties can reach efficient outcomes without government intervention, through bargaining and negotiation.

The Coase Theorem

These are goods that people consume more of as the price rises, contradicting the law of demand. They are rare and typically involve essential items for which no substitute is available.

Giffen Goods

This concept describes how individuals acting independently and rationally according to their own self-interest can deplete a shared resource, even when it’s against everyone’s long-term interest.

The Tragedy Of Commons

Developed by The Economist magazine, this index compares the price of a Big Mac burger across different countries as a way to gauge purchasing power parity and currency valuation.

The Big Mac Index

A game theory scenario where two rational individuals might not cooperate, even if it is in their best interest to do so, due to mistrust and the risk of being exploited.

Prisoners Dilemma

This curve illustrates the relationship between tax rates and tax revenue. It suggests that at some point, increasing tax rates beyond a certain threshold can lead to a decrease in revenue due to disincentives for economic activity.

The Laffer Curve

Named after economist Thorstein Veblen, this effect describes how the demand for a good increases as its price increases, primarily because it serves as a status symbol.this goes against the common understanding of pricing according to supply and demand.

The Veblen Effect

this fallacy describes the belief that a person who has experienced success in the past is more likely to have continued success in the future, despite the outcomes being independent.

The Hot Hand Fallacy

In economic decision-making, this cognitive bias refers to people overestimating their knowledge or abilities in a particular area, often leading to poor decisions.

The Dunning-Kruger Effect

Named after a study conducted at the Hawthorne Works factory, this effect refers to the phenomenon where individuals improve or modify their behavior when they know they are being observed, which can skew experimental results.

Hawthorne Effect

As an avid freakonmics listener, I decided to compile a list of my own personal favorite economic facts and.

Understand yourself and those around you.

psychology

Psychology

15 basic economic principles that you should know 

Find 100+ Ideas and Facts about Money - Curated from interesting sources like Books, Podcasts & Articles - Genuine Insights from like-minded Users like You!