Compound interest and the rule of 72

The rule of 72 is like a math formula. It helps to determine how long an investment takes to double. When I say the rule of 72 is like a math formula, is because investors divide 72 an amount of years to get an estimate of how many years it will take for the initial investment to duplicate itself. Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods.

By using a compound interest calculator, we make money not only out of our initial amount of money, but also on the interest we made the first time. It sounds a little confusing but it is not.
Well I'm going to try to explain it in easier words. Let say I invest 100.00 dollars and the interest rate is 10% in one year I will make 200.00 dollars. The second year my interest rate of 10% will apply on the 200.00 dollars not on my initial amount of money.

Insider Trading Scandal - What Happened?

"There were 13 people arrested on March 1, 2007 accused of trading as insiders. The scheme involved 4 investment bankers, hedge funds, day traders, lawyers and even some supervisors who found out about the trading and blackmailed traders in order for them to keep quiet about the scheme. " Nine of the people involved have been arrested and 4 pleaded guilty to crimes including bribery and securities fraud. The Tactics Used by the traders was really familiar to investigators: tipping traders about potential up/downgrades of stocks, leaking information about stock prices moving and potential stock mergers. Two men that were arrested had met in Grand Centrals "Oyster Bar" to discuss debts owed to one another and exchange cash made from the profits of insider trading. One of the men would give his partner tips on rating changes and in return his partner would make quick changes to his funds and gain a huge profit. Over a 5 year period one of the accused men was said to have made over $5 million in illicit profits.

Critiquing Galvez and Kathy's podcast.

I am critiquing Galvez and Kathy's Federal Reserve Podcast. This is the link to the podcast.
They do very well. Their information is right and is thoroughly discussed. The recording is good and understandable. The pictures that they put make sense and clearly express what is being said in their podcast.It is creative but slightly boring. I didnt really learn anything because thety have the same informationm as everyone else.

Types of economic systems.

Traditional economies
Existed in earlier ages. Basic economic decisions were based on tradition and custom not market activity. It is mainly based on farming for survival. It is also based on primitive methods and tools.

Centrally Planned (Command) Economy
The economy is planned and controlled by a central administration. Basically the government is in charge. It can mostly be found in most communist countries. An example is the former China. Businesses are not allowed to do as they feel.

Market Economy
A Market Economy is an economy that operates by voluntary exchange in a free market. It is not planned or controlled by a central authority. Most of the production, distribution and exchange is controlled by individuals and privately owned companies instead of the government. A Market Economy is the opposite of a Central Economy.

Mixed Economy:

A Mixed Economy allows public and private enterprises to operate at the same time. It contains all types of economic systems. It combines elements of capitalism and socialism.

The Difference Between Socialism and Communism:

The difference between Communism and Socialism is that Socialism is an economic system and Communism is a political system. Socialism allows the people to have a say in how the economy works. Communism only gives a few people a say in the economy works. Socialism is liberal and Communism is conservative.In communism you would have to share everything that you have.

Why the stock market crashed?

China's stock market went down 9 percent which made the rest of the world sell their stocks. This flood selling of stocks caused the stock market togo down 416 points in one day. The Dow has lost about $6 Billion in market value which will send their industrial average into the negatives for the rest of the year. During the Great Depression affected more than the United States. During the Great Depression the stock market crashed and a tremendous amount of people lost most if not all of their money. it took years to get out of the debt.

opportunity costs

Opportunity costs is the cost we pay when we give up something to get something else. There can be many alternatives that we give up to get something else, but the opportunity cost of a decision is the most desirable alternative we give up to get what we want.