I’m a big fan of the Vanderbilt Masters of Finance by John Cochrane and William K. Simon. This book is the best intro to finance that I have ever read, and it’s a great starting point for anyone who is not familiar with finance, especially those who are new to money management.
vanderbilt? I know, I know, it sounds like someone who is not a financial expert, but don’t worry. I’ll do my best to explain everything, so let’s get to it.
The two main things you need to know about finance are that the total amount of money is always changing and that the money you have is the value of your assets. Asset Value (AV) is the amount of money you have that is equal to the current value of your assets. The total amount of money in your bank account is the value of your assets, which is the sum total of your stocks, bonds, commodities, and other investments.
So how do you get paid in finance? You invest the money you have, and that is the value. A good way to think about it is like a stock market with all the people who manage your portfolio.
Assets are what you own. If you only own cash, or stocks, or other assets that can be traded, then you can’t value your assets because the value of those assets are in your hands. But if you own assets that can be valued, like real estate, or other assets that can be leveraged, then you can value your assets with the value of the assets in your hands that can be valued.
In our own case, I own cash and stocks, and everything else is just stuff I keep in my pocket. The value of things in one’s pocket is only the value of things in their pocket.
The value of things in ones pocket is only the value of things in their pocket. If you have $50 and you say that the value of that thing is $50. The value of that other thing is $50 too.
The reality is that the value of things in our pockets is only the value of things in our pockets. So if I have 50 dollars, and I say the value of that thing is 50, that other thing isn’t 50. It’s only 50 because I have 50 dollars.
The way you approach the finance world is by trying to make money on the side of the things you already own. In finance, you have stocks, bonds, and commodities. For example, if I own a stock, I am considered to be getting a return on my investment. If I own a bond, I am considered to be getting a return on my investment. If I own a commodity, then I am considered to be getting a return on my investment.
It’s easy to do these things without a lot of money. But if you want to make money in finance, it takes a lot of experience and determination.
