A Note to the Reader xvii
Acknowledgments xix
Chapter 1 Money, Money, Money 1
The Journey Begins 1
Money from around the World It s Not All the Same 5
The Euro: What s That All About? 10
Exchange Rates and Currency Exchanges 14
Different Ways to Make Money 18
Bitcoin 27
Chapter 2 Different Ways to Pay for Things 29
Checking Accounts 29
Electronic Bill Payment 31
Electronic Banking 33
Credit Cards 33
Debit Cards 36
Wire Transfers 37
Chapter 3 The Stock Market Is Cool 39
Stock Markets and Stock Exchanges: What Is the Difference? 39
What Is a Stock Market? 39
Wall Street and the Stock Market 40
Stocks 47
Stock Certificates 51
Market Cap 52
Bid/Ask/Spread 53
The Free Market and Valuation 54
When Can You Buy and Sell Stocks? 56
Stock Market Indexes 56
Initial Public Offerings (IPO) 59
The Securities and Exchange Commission 65
Market Correction 65
Market Rally 66
Chapter 4 Let s Buy and Sell Some Stocks 67
Buy the Dips 67
Bulls and Bears 68
Paper Profits and Paper Losses 69
Risk On/Risk Off 69
Stock Charts 70
Market Top 72
Market Bottom 73
Trading Range 74
Being Long a Stock 74
Being Short a Stock 75
High-Frequency Trading 80
Fully Invested 82
Leverage 82
Chapter 5 Stock Options (Impress Your Friends with This One) 86
Options and the World of Puts and Calls 86
Options: How They Work 87
Options Expire: They Don t Last Forever 88
Puts 88
More about Puts 90
The Underwater Put Option (Say What?!) 92
Calls 94
More about Calls 97
The Underwater Call Option 99
The Naked Call Option (OMG, Did You Say Naked?!) 100
Trading Options 102
Chapter 6 Funds (Giant Pools of Money) 104
What Is a Fund? 104
Index Funds 105
Mutual Funds 107
Hedge Funds 111
Chapter 7 Bonds and Certificates of Deposit (Sounds Boring but It s Not) 114
Bonds 114
Yield 117
U.S. Treasury Notes and Bonds 118
Basis Points 121
Certificates of Deposit 124
Chapter 8 Analyzing Companies (Seriously, This Will Make You Very Smart) 127
How to Analyze a Company to See If You Want to Buy Its Stock 127
Price/Earnings (P/E) Ratio 131
EBITDA 137
Market Share 138
Earnings Season 141
Guidance 143
Dividends 144
Special Dividends 145
Stock Buybacks 146
Transparency 150
Private versus Public Companies 150
52-Week Moving Average 153
Chapter 9 Borrowing Money (Don t Borrow Too Much Ever!) 155
Mortgages 155
Amortization 158
Credit Ratings and Non Real Estate Loans 160
Default 166
Bankruptcy 167
LIBOR 169
Chapter 10 Interest Rates (Making Money While You Sleep) 170
Simple Interest 170
Compound Interest 172
Annual Percentage Rate (APR) 175
Chapter 11 Net Worth (What s Your Stuff Worth?) 177
Assets 177
Liabilities 177
Net Worth 178
Financial Statements 179
The Oracle of Omaha 181
Chapter 12 Taxes (The Lower, the Better) 183
Gross Income 183
Net Income 183
Taxes 184
Audits 192
Chapter 13 The Economy (The Business of Business) 195
The Federal Reserve (The Fed) 195
Gross As in Really Gross Domestic Product (GDP) 198
Budgets 202
Budgets in Action 203
Our National Debt 204
Deficits and the National Debt; So What? What Do They Have to Do with Investing? 205
Chapter 14 Venture Capital and Private Equity (Big Bets Chasing Big Profits) 207
Venture Capital (VC) 207
Private Equity 213
Chapter 15 Money Smart (Move to the Front of the Class!) 214
Retirement Savings 214
Your Mission, Should You Choose to Accept It 218
You Are Now Money Smart! 219
Chapter 16 And So It Ends or Maybe This Is Just the Beginning 220
Disclaimer 223
About the Author 225
Index 227
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