Day 6: Volatile investments. · The IRL Game 🌎

Day 6: Volatile investments.

Yesterday we talked about different types of investments, today we are talking about volatile investments you may or may not know.

What are volatile investments? Generally think of the stock market, startups, and crypto. Why are they volatile? Because while other investments have steadier or more predictable growths, volatile investments do not have a stable growth that most other investments have. The upside is benefits and higher growth ceiling.

So what are the options? A lot. A lot I don't know, so the ones I do know are stocks, startups, and crypto.

Stocks are loaded with options. What do I mean by that? Stocks have categories like common and preferred stocks, Class A and Class B stocks. What do they mean and how do you make money from them?

Well first off the main stock types are common and preferred stocks. What are they? Common is as said, the most common stocks traded. They allow you he right to vote and grow based on the company's profits. So when a company is making record sales your common stock rises. When it falls so does your stock. Preferred stocks are more like bonds. They offer dividends at a fixed rate and if a company ever goes bankrupt you will be first group in line to receive your payouts before the common stock holders. While you don't get the right to vote with a preferred stock it is the best for long term growth. In summary: Common stock is betting the company makes profit, Preferred stocks is betting the company stays around.

Class A and B stocks are just filters for who gets the dividend first or even benefits like how powerful your voting right is. So you can have Class A&B Common stocks and Class A Common stocks are the ones getting their dividends before Class B holder. Same thing applies to Preferred stocks when it comes to Class A&B.

Bonus fact: Some stocks give you benefits like Royal Caribbean stocks give discounts on cruises for stock holders. So do your research.

Startups. Just like stocks they can be volatile. When you invest into a startup you can either invest into their stocks or buy ownership. Where regular stocks market has companies that are generally stable or long lasting, a startup has a very real possibility to fail and go bankrupt. Something new to know is ownership. Mainly ownership is he amount of power and well ownership you have in a company. Think of this as preferred stocks as a gross approximation. Money and growth for startup investments can be high in the sky or absolutely flop. Like gambling be more random and messed up by human involvement.

Crypto is like stocks in a loose approximation. While stocks grow based off of worth and performance Crypto is based more off of how many people are interested or like that currency and the mining of the currency. Highly volatile and no something I recommend.

As always DO YOUR RESEARCH. This is just an average person teaching others on complex financial subjects.

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