Once again, this man makes these topics easy to understand by attention to detail. Many people assume others know the terms or speak as if we’ve been following the topic all along. Nice work
"the whole point of it is to take a lot of that for yourself for you to live off of and put it in some swiss bank account to be able to escape the country at some point" thanks for the advice
I don't know how these scammers can live like this, seems like an extremely stressful life to carry on this insane lie that at any moment can collapse the second more money than you have is demanded to be withdrawn.
wow!!! this makes so much sense! all the media broadcasted was that a panzi scheme was some horrible financial strategy, but they probably didn't know how to explain it themselves!!!
Can someone give me a quick explanation about how this scam works and the similarities between it and fractional reserve banking? I didn't understand a thing! :-/
The difference is; banks do actual investments but the investments supersedes the actual money. Banks aren't a scam. This is just monetary redistribution and not real investments.
Best explanation of the Ponzi scheme out there. By the way it blew my mind when I wikipedia'd Bernie Madoff and found out he was a non-executive chairman of NASDAQ. His Ponzi scheme was at the scale of billions of USD! Staggering. Anyway, I would have loved the video to close with a few remarks on what the Wall Street / markets learned from his case, and how can this scheme be prevented in this day and age.
Drum up more new "investors" to be interested. They do that until there are no more "investors" to get involved. Which is why a Ponzi sheme inevitably collapses.
@OperationThor Yeah, fractional banking is sort of like this. The difference is banks use your money to make loans, the interest on these loans is the bank's profit. So, the bank's assets always equal their liabilities and still make money. Bank runs (where everyone tries to withdraw their money all at once) are very nasty, but they don't happen very often nowadays because governments insure bank deposits.
In one respect your correct. today the the stock market and banks works under new rules. no more Steagall act, credit default swaps they work like ponzi's, you set up a fake insurance company to cover the swap. but the insurance company has no cash or real asset's. then the seller finds a buyer to cover his short sell. waits for awhile to rise. then the stock falls like mad. the short seller gets his cash. but never had any money in the game to start with. Prof Kumar of SMU wrote about it.
Good illustration here Khan. This may be obvious but isn't the Fractional Reserve Lending technique similar to this while banks creates loans without the actual deposits set aside O.o
@KrispyKangaroo Ponzi scheme can also be investing money, the key point is that the stated returns are higher than their actual returns. They say they are better than average, but are actually just average, and so will eventually default. Money printing is not a ponzi, its just inflationary, because you dont owe anything, they owe you but the money supply increases. Hence house prices can rise if you're willing to lend more money - house price inflation.
@ViraIVideos a bank is a business trying to make a profit. the way that a bank makes money is by investing YOUR MONEY on OTHER PEOPLE's projects in the form of loans. when you put money in the bank, you get PAID interest for trusting them that they will invest your money responsibly. the people that borrowed your money PAY the bank back that money when they earn money from their project. Just because seven people thumbbed-up your comment doesn't mean it's right. watch sal's basic banking vids.
The father of a girl I went to High School with was arrested for running a Ponzi scheme a while back. His name was Clifford Puterbaugh and media deemed him the "Bernie Madoff of Portland". I actually had been over to their house a few times before everything caught up to him. Sometimes he would randomly take us places where he would pull out a giant wad of hundreds and just start blowing cash on all sorts of crazy shit. In hindsight it all makes sense, but as a High Schooler I had zero suspicion about his behavior. Shit was so crazy when the news came out. That is not something you would ever expect to happen.
1. **Industrial and Commercial Bank of China (ICBC)** 2. **Agricultural Bank of China (ABC)** 3. **China Construction Bank (CCB)** 4. **Bank of China (BoC)** 5. **JPMorgan Chase** 6. **Bank of America** 7. **HSBC** 8. **BNP Paribas** 9. **Mitsubishi UFJ Financial Group (MUFG)** 10. **Crédit Agricole**
I think banks have the real money in comparison to this schemes where everything is bluff and the government provide you security with your money in case of legitimate banking.
@42streetsdown yea but there is only around 800 billion paper dollars in circulation so if there is a HUGE nationwide bank run and the government is forced to insure bank deposits they have 2 options, give you cash by printing or giving you numbers on a computer screen. And in a bank run everyone wants cash, so if they dont print cash is going to surge in value, if they do print its going to drop tremendously in value. If confidence is lost in the system... gameover.
Subtle point is that many savvy investors will willingly invest in something they believe to be a Ponzi scheme that is in its infancy. Reason why is exactly what Investor A did here. If for example Investor A strongly suspected the subject was running a Ponzi but could have success at it, he may invest his money, then pull out his fake $40K that is paid in very real cash. There are a number of examples of investors using a Ponzi scheme for their own profit however the key is to be a very early investor.
🤣😂🤣🤣thats what i do... Ive made allot of cash with that strategy.. basically i just put away the profit lf the 1st 2 investments, and then invest again and leave it to grow until i feel satisfied... So far ive only lost 1000 usd from one that collapsed, but in that 1000 usd i lost, i made around 25 000 usd...bits insane... But its also scary because when you first start, you never know if you are part of the last pool of investors or new pool, so that part is just hoping
@kahnacademy This situation seems similar to how the stock market works as a whole. What is the line that is drawn between a Ponzi scheme and the stock exchange? My understanding is that when I take money out on a stock, I am getting that money from a newly convinced buyer.
People are supposed to pay back that debt. The "printed" money is backed by the borrowers future work power. While in a ponzi scheme the money is apparently just for you to keep.
a lot of people are dead in South Africa as we speak through this Ponzi scheme, the investor is no where to be found people were told that its a Bitcoin wallet.
There are several examples of Ponzi Schemes: Real estate in general (older generations fleecing younger generations who come in the market later), Social Security (for the same reasons), most modern day insurance companies, most financial services, our entire tax structure is starting to look like a Ponzi scheme. . .
Then the price falls back on Friday, lets say to $65 a barrel. then on Monday they do it all over again. the price is back up to $79 a barrel. Thats how its being done now days and they use your money, which we are paying interest on to the Fed for borrowing it. but the banks use it to enrich their own pockets, and you pay the bill over the next 20 or 30 years at 4% interest. You have a nice day now.
@shadfurman Why do we have so many FREE seminars on how to trade stocks? How is it not lulling people into become a meal for someone who needs to get profit? Something is wrong with this concept nowadays. Maybe too many banks are 'solvent' and you can still buy/sell their shares for some value. Either public would refuse to lend to them at 0% interest (given to them to trade their way out of 'solvency' while someone is losing) or they will get public lose eventually. What about HFT trading?
what if you managed to do something real with the money, but the return is probably low, but you convinced investors that the return is high, and you were able to do this cash flow scheme on top of it....
@shadfurman Let's look at ponzi scheme from this view: pyramid works as long as new money is coming. The stock grows as long as new money is coming. Once you try to sell the stock in big volumes the price will go down, That's one of the reasons why crash may happen. It's like a game 'who takes the last chair'. Also, the stock market is a great accumulator of money that could inflate economy otherwise.
Better Ponzi scheme: start with investors who are willing to invest around $10,000 and promise them a 2% return on the money in 6 months for a net increase of 4%. Give them the option of being paid dividends or a lump sum to draw out. Keep assembling investors along the way and chances are the original investors will keep their money in with you as you get more investors to pay them off. Bottom Line: You have lots of money to spend, little to pay considering they won't get paid for 6 months.
@ViraIVideos though banks are giving you interest on the money you keep with them, they aren't claiming to "double" your money without any backing. they are making interest from people who take out loans. to make a profit, the bank has to earn more interest than they give out. the problem is that getting back the money from these loans takes time, and sometimes people can't pay back their loans if they are in debt. the problem, at the moment, is the number of people in debt.
If you can make the animation faster you could have helped millions of my countrymen understand that they are in a ponzi scheme.. Im looking for this but in a faster format .. Trying to make them understand
Larry---Larry---Remember me? Yer old old buddy from the; "Both Hands & Both Feet" (at the same time)---in the Corporate Lunch Box---before the bosses had all gone home and before we were even ten minutes into the shift??? I been waitin' fer yer e-mail---or for ya' to answer the phone--I missed you at my Farewell Party---I had requested that you play "MY" version---which was a pretty good parody on Gene Watson's --HIT!" Gimmee a buzz---Txx JK
The stock market is one big Ponzi yes, you can use margins, go long or short, speculators, credit default swaps, derivatives, you name it. Here is a good example, The Fed gives money to the central banks at Zero Interest to loan to other banks, under the bailout bill. but the central banks don't loan it out, instead they buy oil futures stock, on the the stock market. drive the price up cause they have hugh amounts of your money now to use. then about Thursday they cash out. they made 100M
There is indeed at least one much bigger Ponzi Scheme and much longer lasting one that exists today. It's known popularly as Social Security. The biggest difference is that in a Ponzi Scheme, at least you had a choice to buy into it.
@toto20091 People are responsible to educate themselves. Trading stocks is not hard (it does take patience which many people find hard nowdays) All you've gotta do is follow a few simple rules. My rules are: Never trade money I don't have (or need) Only buy in companies that make money, in the + Only buy in companies that are near their 52wk low Only buy in companies I'd likely make at least 12% on (based on trend) Always sell at a the amount I predetermined to sell at (based on trend) Diversify
@shadfurman Maybe you are right but as long as these shares are between, let's say, 3 people - owners of the company when they divide profit. When it is thousand investors, it is more illusion that they all will get profit. Someone has to lose in order for the rest to get profit finally. As long as most shareholders are kept under the illusion that the stock will grow indefinitely, it will look nice. It is impossible to grow indefinitely, so someone will have to lose. How come is it not ponzi?
Yet again, an excellent video. I have a question though. Recently, I have heard comparisons that the recent financial/mortgage crisis can be likened to a Ponzi scheme. Would this be a fair generalization/assessment, and if so to what extent is it like or not like a Ponzi scheme? Thanks again Khan, and btw I've used your videos on physics to help me out on my physics I midterms. Good stuff.
so the people who took their money out early are actually taking the other investors money without knowing it? did they have to end up paying some back when madoff was caught?
So a ponzi schemer tells the client he'll invest the money to make more, but where is the proof? Does the client just instantly believe him? Can the client check if the money is actually there or is it a "take my word for it" type deal?
@toto20091 A stock MAY grow if money is coming in, but it is not the only thing that makes a stock valuable. Stocks have the value that people PUT on them. Also some stocks pay dividends. There is a VALUE behind a stock, which is more than we can even say for the U.S. dollar. It can be worth more or less than the value in the company, because it is not the money that gives a stock value.
@Zalzal019 HAHA! That might be more accurate to the point. But then, I'm not a huge fan of the social security system. Though at has been a help to disabled friends and family, I can only imagine it would be more beneficial if the money was left if the pockets of citizens.
@toto20091 its true, it is very easy to loose money in stocks. However a smart diversified portfolio will put the probability of your portfolio being worthless nearly impossible. I have no highschool education (though I've FINALLY started going to collage, YAY!) I bought a couple books on stock from good will and trade 90% on intuition and my porfolio has never made less than 9%. The average over the last 7 years is 14%. Its quite simple, buy low, sell high in stable companies.
Once again, this man makes these topics easy to understand by attention to detail. Many people assume others know the terms or speak as if we’ve been following the topic all along. Nice work
@siggyboss Yeah I realized that after the video. I did this with a new version of the software. Need to make sure it shows up for the next video.
"the whole point of it is to take a lot of that for yourself for you to live off of and put it in some swiss bank account to be able to escape the country at some point" thanks for the advice
I don't know how these scammers can live like this, seems like an extremely stressful life to carry on this insane lie that at any moment can collapse the second more money than you have is demanded to be withdrawn.
I like how he reffered to Bernard Madoff and charles Ponzi as "gentle men" lol
wow!!! this makes so much sense! all the media broadcasted was that a panzi scheme was some horrible financial strategy, but they probably didn't know how to explain it themselves!!!
Khan Academy killing it once again. I'm pretty naive when it comes to money / investing but this illustrated it very well. Thanks!
God, this is the best video of his whole play list, the easiest way to make money. Its amazing how well he teaches such a scheme!!
Very informative and easy to understand! Thank you.
Aha this is basically describing fractional banking system
Isn't this kinda how banking works?
+Mauricio Berlanga that is exactly what popped up in my mind when I heard that video.
+Mauricio Berlanga This is exactly how banks work, they loan out the money we put in, in hopes that not everyone withdraws at the same time.
you are absolutely right.
Can someone give me a quick explanation about how this scam works and the similarities between it and fractional reserve banking? I didn't understand a thing! :-/
The difference is; banks do actual investments but the investments supersedes the actual money. Banks aren't a scam. This is just monetary redistribution and not real investments.
Best explanation of the Ponzi scheme out there. By the way it blew my mind when I wikipedia'd Bernie Madoff and found out he was a non-executive chairman of NASDAQ. His Ponzi scheme was at the scale of billions of USD! Staggering. Anyway, I would have loved the video to close with a few remarks on what the Wall Street / markets learned from his case, and how can this scheme be prevented in this day and age.
sounds like Social security to me
really well explained. this helped a lot! thanks!
Great video. Thanks.
Drum up more new "investors" to be interested. They do that until there are no more "investors" to get involved. Which is why a Ponzi sheme inevitably collapses.
@OperationThor Yeah, fractional banking is sort of like this. The difference is banks use your money to make loans, the interest on these loans is the bank's profit. So, the bank's assets always equal their liabilities and still make money. Bank runs (where everyone tries to withdraw their money all at once) are very nasty, but they don't happen very often nowadays because governments insure bank deposits.
Cool I'm trying this next week!
Wow ur better then Wikipedia
In one respect your correct. today the the stock market and banks works under new rules. no more Steagall act, credit default swaps they work like ponzi's, you set up a fake insurance company to cover the swap. but the insurance company has no cash or real asset's. then the seller finds a buyer to cover his short sell. waits for awhile to rise. then the stock falls like mad. the short seller gets his cash. but never had any money in the game to start with. Prof Kumar of SMU wrote about it.
The lesson here is don't be fooled by statements. As an investor you have to be smart and know how you're money is being used.
@kxmode Took the words out of my mouth.
this was a very fun video!
Brilliant video! Thank you very much!
Good illustration here Khan.
This may be obvious but isn't the Fractional Reserve Lending technique similar to this while banks creates loans without the actual deposits set aside O.o
RIP (17/01/2018) Bitconnect!
That guy was a legend.
@KrispyKangaroo Ponzi scheme can also be investing money, the key point is that the stated returns are higher than their actual returns. They say they are better than average, but are actually just average, and so will eventually default. Money printing is not a ponzi, its just inflationary, because you dont owe anything, they owe you but the money supply increases. Hence house prices can rise if you're willing to lend more money - house price inflation.
@ViraIVideos a bank is a business trying to make a profit. the way that a bank makes money is by investing YOUR MONEY on OTHER PEOPLE's projects in the form of loans. when you put money in the bank, you get PAID interest for trusting them that they will invest your money responsibly. the people that borrowed your money PAY the bank back that money when they earn money from their project. Just because seven people thumbbed-up your comment doesn't mean it's right. watch sal's basic banking vids.
The father of a girl I went to High School with was arrested for running a Ponzi scheme a while back. His name was Clifford Puterbaugh and media deemed him the "Bernie Madoff of Portland". I actually had been over to their house a few times before everything caught up to him. Sometimes he would randomly take us places where he would pull out a giant wad of hundreds and just start blowing cash on all sorts of crazy shit. In hindsight it all makes sense, but as a High Schooler I had zero suspicion about his behavior. Shit was so crazy when the news came out. That is not something you would ever expect to happen.
AWESOEM!
1. **Industrial and Commercial Bank of China (ICBC)**
2. **Agricultural Bank of China (ABC)**
3. **China Construction Bank (CCB)**
4. **Bank of China (BoC)**
5. **JPMorgan Chase**
6. **Bank of America**
7. **HSBC**
8. **BNP Paribas**
9. **Mitsubishi UFJ Financial Group (MUFG)**
10. **Crédit Agricole**
khan! great explanation!! but how is this ponzi scheme different from the way banks in general work??
I think banks have the real money in comparison to this schemes where everything is bluff and the government provide you security with your money in case of legitimate banking.
Enjoyable!
@42streetsdown yea but there is only around 800 billion paper dollars in circulation so if there is a HUGE nationwide bank run and the government is forced to insure bank deposits they have 2 options, give you cash by printing or giving you numbers on a computer screen. And in a bank run everyone wants cash, so if they dont print cash is going to surge in value, if they do print its going to drop tremendously in value. If confidence is lost in the system... gameover.
Subtle point is that many savvy investors will willingly invest in something they believe to be a Ponzi scheme that is in its infancy. Reason why is exactly what Investor A did here.
If for example Investor A strongly suspected the subject was running a Ponzi but could have success at it, he may invest his money, then pull out his fake $40K that is paid in very real cash.
There are a number of examples of investors using a Ponzi scheme for their own profit however the key is to be a very early investor.
🤣😂🤣🤣thats what i do... Ive made allot of cash with that strategy.. basically i just put away the profit lf the 1st 2 investments, and then invest again and leave it to grow until i feel satisfied... So far ive only lost 1000 usd from one that collapsed, but in that 1000 usd i lost, i made around 25 000 usd...bits insane... But its also scary because when you first start, you never know if you are part of the last pool of investors or new pool, so that part is just hoping
@kahnacademy This situation seems similar to how the stock market works as a whole. What is the line that is drawn between a Ponzi scheme and the stock exchange? My understanding is that when I take money out on a stock, I am getting that money from a newly convinced buyer.
What's the difference between fractional reserve banking and the ponzi scheme?
+Matt Lockhart Bank dont give you taht good % :D
Bank deposits are insured by the FDIC. Ponzi scheme deposits are not insured.
People are supposed to pay back that debt. The "printed" money is backed by the borrowers future work power. While in a ponzi scheme the money is apparently just for you to keep.
sounds like you are describing the US Treasury fed reserve relationship
"The Boiler Room", great movie! Vin Diesel and Giovanni Ribisi.
How abt u do one abt Pyramid scams.. where they have products involved making the process look more legit..
Except it replaces contributions with legal plunder.
a lot of people are dead in South Africa as we speak through this Ponzi scheme, the investor is no where to be found people were told that its a Bitcoin wallet.
what software do you use for your tutorials, Mr. Khan?
There are several examples of Ponzi Schemes: Real estate in general (older generations fleecing younger generations who come in the market later), Social Security (for the same reasons), most modern day insurance companies, most financial services, our entire tax structure is starting to look like a Ponzi scheme. . .
We all have to work together.. I mean, look at the insurance industry -it works most of the time.
Then the price falls back on Friday, lets say to $65 a barrel. then on Monday they do it all over again. the price is back up to $79 a barrel. Thats how its being done now days and they use your money, which we are paying interest on to the Fed for borrowing it. but the banks use it to enrich their own pockets, and you pay the bill over the next 20 or 30 years at 4% interest.
You have a nice day now.
@shadfurman Why do we have so many FREE seminars on how to trade stocks? How is it not lulling people into become a meal for someone who needs to get profit?
Something is wrong with this concept nowadays. Maybe too many banks are 'solvent' and you can still buy/sell their shares for some value. Either public would refuse to lend to them at 0% interest (given to them to trade their way out of 'solvency' while someone is losing) or they will get public lose eventually. What about HFT trading?
what if you managed to do something real with the money, but the return is probably low, but you convinced investors that the return is high, and you were able to do this cash flow scheme on top of it....
good music
@shadfurman Let's look at ponzi scheme from this view: pyramid works as long as new money is coming. The stock grows as long as new money is coming. Once you try to sell the stock in big volumes the price will go down, That's one of the reasons why crash may happen. It's like a game 'who takes the last chair'.
Also, the stock market is a great accumulator of money that could inflate economy otherwise.
explained clearly
792 comments now 792 people have an idea to start a new ponzi .... LOl ..
@pongman same thought crossed my mind! super duper risky, but...odddly tempting....lol
Sal's running a ponzi scheme; watch out guys!
Better Ponzi scheme: start with investors who are willing to invest around $10,000 and promise them a 2% return on the money in 6 months for a net increase of 4%. Give them the option of being paid dividends or a lump sum to draw out. Keep assembling investors along the way and chances are the original investors will keep their money in with you as you get more investors to pay them off. Bottom Line: You have lots of money to spend, little to pay considering they won't get paid for 6 months.
Sounds like modern banking system
@ViraIVideos though banks are giving you interest on the money you keep with them, they aren't claiming to "double" your money without any backing. they are making interest from people who take out loans. to make a profit, the bank has to earn more interest than they give out. the problem is that getting back the money from these loans takes time, and sometimes people can't pay back their loans if they are in debt. the problem, at the moment, is the number of people in debt.
What are schemes like Shoemoney called?
Double it again!
I wish I was an earlier investor in Madoff''s scheme then I could double my money. Hey Sal! Do you know of any current Ponzi scheme's? lol
Just go to the lender of last resort at the end, it's ok 😂
WOW, great explanation! So it works as long as you're the first one lol! What is a pyramid scheme?
Trollfinancing!
real business can be built around that actualy is built
@yjakez Yet it worked
If you can make the animation faster you could have helped millions of my countrymen understand that they are in a ponzi scheme.. Im looking for this but in a faster format .. Trying to make them understand
how was ENRON not mentioned?
Social security
Huh, this is a thing, I thought of it myself not too long ago
Hahahaha! Nice one....A!
The largest and longest one is our economy.
Cool! Now I know how social security works!
Shut up
@@samsonsoturian6013 Yo mamma lol
@@Zalzal019 shut up
@@samsonsoturian6013 make me
@@Zalzal019 shut up
returns are realistic from loans
they dont just seem realistic
Let's not forget George Bluth!
In Bangladesh, the same is happening right now with a company named "Evaly". How do we educate people about it?
So Bitcoin?
@part2themovie He uses paint
Larry---Larry---Remember me? Yer old old buddy from the; "Both Hands & Both Feet" (at the same time)---in the Corporate Lunch Box---before the bosses had all gone home and before we were even ten minutes into the shift???
I been waitin' fer yer e-mail---or for ya' to answer the phone--I missed you at my Farewell Party---I had requested that you play "MY" version---which was a pretty good parody on Gene Watson's --HIT!" Gimmee a buzz---Txx JK
The stock market is one big Ponzi yes, you can use margins, go long or short, speculators, credit default swaps, derivatives, you name it.
Here is a good example, The Fed gives money to the central banks at Zero Interest to loan to other banks, under the bailout bill. but the central banks don't loan it out, instead they buy oil futures stock, on the the stock market. drive the price up cause they have hugh amounts of your money now to use. then about Thursday they cash out. they made 100M
Can it hold 10,000 does? How about 10,000 fawns?
Ok, now let me write the code...🤑😅
in hindsight - the investors look very naive
Biiiiiiitconeeeeeeeect....
1st!!!!
Full tilt poker?
ponzi is my calculus teachers name
@42streetsdown fractional banking may turn out to be the biggest ponzi scheme yet. And this is coming from a guy who is a fan of fractional banking.
@NOyaPara I don't have a property large enough to hold 10,000 bucks.
@OntologicalQuandary lol apparently. Lesson 1 from ViralVideos: banks print money. WHO KNEW?
There is indeed at least one much bigger Ponzi Scheme and much longer lasting one that exists today. It's known popularly as Social Security. The biggest difference is that in a Ponzi Scheme, at least you had a choice to buy into it.
Exactly right!!!
@toto20091 People are responsible to educate themselves. Trading stocks is not hard (it does take patience which many people find hard nowdays) All you've gotta do is follow a few simple rules. My rules are:
Never trade money I don't have (or need)
Only buy in companies that make money, in the +
Only buy in companies that are near their 52wk low
Only buy in companies I'd likely make at least 12% on (based on trend)
Always sell at a the amount I predetermined to sell at (based on trend)
Diversify
@shadfurman Maybe you are right but as long as these shares are between, let's say, 3 people - owners of the company when they divide profit. When it is thousand investors, it is more illusion that they all will get profit. Someone has to lose in order for the rest to get profit finally. As long as most shareholders are kept under the illusion that the stock will grow indefinitely, it will look nice. It is impossible to grow indefinitely, so someone will have to lose. How come is it not ponzi?
Yet again, an excellent video. I have a question though. Recently, I have heard comparisons that the recent financial/mortgage crisis can be likened to a Ponzi scheme. Would this be a fair generalization/assessment, and if so to what extent is it like or not like a Ponzi scheme? Thanks again Khan, and btw I've used your videos on physics to help me out on my physics I midterms. Good stuff.
so the people who took their money out early are actually taking the other investors money without knowing it?
did they have to end up paying some back when madoff was caught?
Thanks to crypto today, all transactions are private, so nope😂😂
What if investor A quit after his money was “doubled”
That when it crashes
So a ponzi schemer tells the client he'll invest the money to make more, but where is the proof? Does the client just instantly believe him? Can the client check if the money is actually there or is it a "take my word for it" type deal?
Those are no gentlemen, good sir.
@ExZonie OH hai, Rick Perry
@toto20091 A stock MAY grow if money is coming in, but it is not the only thing that makes a stock valuable. Stocks have the value that people PUT on them. Also some stocks pay dividends. There is a VALUE behind a stock, which is more than we can even say for the U.S. dollar. It can be worth more or less than the value in the company, because it is not the money that gives a stock value.
@Zalzal019 HAHA! That might be more accurate to the point. But then, I'm not a huge fan of the social security system. Though at has been a help to disabled friends and family, I can only imagine it would be more beneficial if the money was left if the pockets of citizens.
@toto20091 its true, it is very easy to loose money in stocks. However a smart diversified portfolio will put the probability of your portfolio being worthless nearly impossible. I have no highschool education (though I've FINALLY started going to collage, YAY!) I bought a couple books on stock from good will and trade 90% on intuition and my porfolio has never made less than 9%. The average over the last 7 years is 14%. Its quite simple, buy low, sell high in stable companies.