Why was there a tulip bubble? There was a tulip bubble in Holland and across Europe in the 16th century because tulips were rare and because people didn’t want to lose out on an opportunity to make money. The tulip bubble, also called tulipmania, is a good showcase for human nature. It shows how people […]
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What is a hedge fund? A hedge fund is a pool of money invested by private individuals. Their money has more power together than they each would have individually. The expression “hedge” fund came about in 1949 and the word “hedge” was used to imply that the fund was hedged against risk. That means that
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What is a Ponzi scheme? It is a type of fraud where you use money invested by new people to pay profits to the people who are already invested. It was named after Charles Ponzi who certainly didn’t invent the scheme but who made it famous. (Incidentally, Ponzi scheme, scam, and con are all relatively
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How does promotion insurance work? It is basic insurance that covers businesses that offer promotions or competitions that are basically a publicity stunt. Promotion insurance, like all types of insurance, is a form of risk management. The idea of risk management has been around for thousands of years because disasters have always happened. Archaeologists discovered
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What are war bonds? War bonds are a way of raising money to fight a war from the citizens of that country, and a way of keeping inflation under control. The first public war bonds were issued during World War 1. Without them, both of the wars might have been lost. Despite the technological advances
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What is the fast fashion graveyard? It is a place where the fast fashion clothing waste ends up, causing environmental disasters. What is fast fashion? Fast fashion is called fast fashion because it is produced extremely quickly and to give it the same connotations as fast food. Just like fast food, the clothes are made
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How does the magnetic strip on a credit card work? A magnetic strip has three tracks that hold all of the information pertaining to a card by magnetizing tiny iron particles. We have probably all seen a credit card with a magnetic strip and we have all heard that you shouldn’t keep your credit card
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Why is the black market called the “black” market? This type of market has existed for as long as there has been trade, but the name “black market” appears to have become common after World War 2 and it is probably only called black because it is a shadow, or hidden market. A black market
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Why do prices always go up? They go up because the value of our money decreases. If you go online, you can find inflation calculators for most currencies. For some countries, those currencies no longer exist. If you look at any country that has a currency with a history, even if that is only a
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What is a limited company and a shell company? A limited company is one where the risk is limited to the money the company has. A shell company is a company without any business operations or assets. I’m going to use the word company here, but there are some differences between company and corporation. The
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