In my perfect world, there is no economy. I hate money and I hate all of the intricate ways to make more of it that I will never understand. Unfortunately, I have recently come to terms with the fact that money is not going anywhere and if I can’t beat them, I should join them. So, on the day I decided this I called my best friend from home at the University of Georgia and had him explain Bitcoin to me – slowly. Now I will girlsplain three vital pieces of integral economic lore that will help you in the long run:
Bitcoin
Now, I will never invest in Bitcoin, but I think that cryptocurrency is something that everyone should kind of understand, in case it takes over the world (like it’s looking like it might). So, one day, this anonymous group of economists/coders created a new form of currency that can only be unlocked with hours of coding (“mining”) by a bunch of Bitcoin workers (“miners”). They spend hours and days and months trying to find the right combination to open this imaginary safe, and when they do, “bitcoin” flows out. So, people decided to invest in this, and the more that you invest, the more bitcoin it is assumed, will flow out. This imaginary currency is only valuable because humanity has deemed it valuable, like we have deemed green paper valuable. For more information, skim the “white pages,” which explain this in probably more correct terms.Â
Roth IRA
I do not trust myself to invest in stocks, I like to play it safe when it comes to money. However, Roth IRA’s are apparently very safe to invest in, because even if you lose money in the short term, when you open your Roth at retirement, it is guaranteed to be a lot more than when you originally invested. You can invest up to about $7k per year and you can only withdraw from it for educational purposes or when you’re retired. This is really just a great way to save money too, because you literally can’t get it back until it has grown in worth. Open one NOW.Â
High Yield Savings Account
I am one to hoard all of my money in a savings account, but recently I learned that my money was just depreciating there day after day. Most normal banks savings accounts only have like a .001% growth rate meaning that over the year, you only gain, like, less than a dollar in interest. But, there is an easy way to change that! A lot of high yield savings account companies exist. I just opened one with a 4.5% growth rate, and now I make passive income! I use Wealthfront, but there are a ton of different options, and you can easily transfer money between accounts if you need to buy something. I really don’t see a downside in this one, it’s literally just free money.Â
My economics knowledge is very low, but these are three staples that I think are an important background knowledge to have, especially to safely diversify and grow my assets. Trust me, if I can do it, anyone can.Â