My lemonade stands

Having no background or knowledge in anything remotely close to the word “Finance”, it has never really stopped me from wanting to learn more about it. With the internet so heavily integrated into our daily lives, it is not difficult to learn an entirely new topic from scratch.

YouTube has always served as a powerful tool for me to gain knowledge. The above video was something that I have watched over the weekend and I am sure that it would be useful to beginners who want to know more about Fundamental Analysis. It was an engaging 44 minutes and I highly encourage anyone who is a literate idiot to finance, investing, or how a business operates to watch it.

This is what I’ve personally learnt from the video.

  1. It is important to know the financial status of the business using their annual report. Namely using the Income Statement, Balance Sheet and Cash Flow Statement. They tell the story of how the business operates and possible future value or earnings based on certain assumptions.
  2. There is a difference between being a creditor and a shareholder. Due to the different amount of risk taken for each stakeholder, the returns are different as well.
  3. When investing your money, make sure you aren’t using money you need in the near future. (probably 5 to 10 years) and build an emergency fund. You never know when shit might happen.
  4. Invest in companies that are “stable”. Start watching at 32.33 minute for more information.

I wonder how many lemonade stands I might encounter throughout my life. I’m certainly looking forward to make a few right judgement calls in my investment journey.

Thanks for reading!

Miss Niao xoxo

 

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Author: missniao

Hello! I blog about financial matters and things that average people can do to have a better retirement. I want to inspire people to take control of their money and have a better understanding about it. If you are interested to know more, follow me @ missniao.wordpress.com! :)

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