Would you like to know what stocks, bonds, and derivatives actually are and how they actually work? Listen to today’s show to build your foundational knowledge so you’re not fooled by faulty analysis of markets.

Join us as we discuss:

  • Real assets vs. financial assets (all wealth comes from real assets–financial assets merely represent a claim on real assets/income and serve to allocate it among investors)
  • Real assets are land, buildings, machinery, and knowledge that can be used to produce goods and services.
  • Financial assets are purely pieces of paper (or, nowadays, journal entries in a computer) which allocate the income that is created by the use of real assets.
  • Fixed-income securities (also known as bonds or debt securities) promise either a fixed stream of income or a stream of income based upon a formula. Their performance is closely tied to the financial condition of the issuer.
  • Equity securities (stocks or ownership assets) represent an ownership share in a corporation. Their performance is tied to the success of the firm and its real assets.
  • Derivative securities (for example options, futures, and swap contracts) provide performance that is determined by the prices of other assets such as bond or stock prices. They’re most often used as a risk transfer mechanism/insurance in portfolios although they can be used for speculation.
  • Remember that you can also invest directly in real assets such as real estate, agricultural products, precious metals, etc.

Thank you so, so much to those of you who have been leaving reviews for the show in iTunes! I really appreciate you! We had a record number of downloads in one day yesterday and it’s only because of your support.

I read your reviews on the show:

Extremely Informative ***** (5 stars)
by: Steveonomics (United States )
“Best financial podcast out there. So glad he is back on the air.”

Thank you very much, Steve! Steve writes a blog “Where Freedom & Fashion Meet Finance” and just had an article featured in the Huffington Post! (“I Spent Just $1,000 on My Wedding. Here’s How”)

Smart ***** (5 stars)
by: Wolf_M. (Germany )
Awesome non-dogmatic approach to finance with some real gems, where several layers of efficient concepts are stacked on top of each other. Really good to broaden the own horizont. Though, daily shows? Please dont burn out! wmthoughts

Thanks, Wolf! I won’t burn out. I promise. I’ll do at least 1,000 shows and then I’ll think about burning out!

Helped me save money **** (4 stars)
by: ElisaGabriela (United States )
It’s so nice to have a lower cell phone bill than my friends and parents, and still have all the same features. An interview on this podcast explained how to choose the best plan for me. $25/mo on a smartphone? Yes, please.

“Yes, please,” indeed! Here’s to many, many more  people saving much, much more!!!

Thank you all for your reviews. I’m hoping that the show can get featured in iTunes and the only way that happens is through your listening, telling your friends, and leaving your comments and reviews. I appreciate every one of them! If you haven’t left a review yet, please go to http://radicalpersonalfinance.com/itunes and rate and review the show.

Thank you!

Don’t forget that Friday will be a Q&A show. If you have a financial planning question that you’d like me to answer on the show, please email it to me.

Thanks!

Joshua

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