Banking Explained Money and Credit

The international banking system is an enigma. There are more than 30.000 different banks world wide, and they hold unbelievable amounts of assets. The top 10 banks alone account for roughly 25 trillion US-Dollars. Today, banking can seem very complex, but originally, the idea was to make life simpler. 11th century Italy was the centre of European trading. Merchants from all over the continent met to trade their goods, but there was one problem: too many currencies in circulation.

In Pisa, merchants had to deal with seven different types of coins and had to exchange their money constantly. This exchange business, which commonly took place outdoors benches, is where we get the word "bank" from; from the word "banco", Italian for "bench". The dangers of travelling, counterfeit money and the difficulty of getting a loan got people thinking. It was time for a new business model: home brokers started to give credit to businessmen, while genevese merchants developed cashless payments.

Networks of banks spread all over Europe, handing out credit even to the church, or European kings. What about today ? In a nutshell, banks are in the risk management business. This is a simplified version of the way it works. People keep their money in banks and receive a small amout of interest. The bank takes this money, and lends it out at much higher interest rates. It's a calculated risk, because some of the lenders will default on their credit.

This process is essential for our economic system, because it provides ressources for people to buy things like houses, or for industries to expand their businesses and grow. So banks take funds that are unused by savers, and turn them into funds society can use to do stuff. Other sources of income for banks include accepting saving deposits, the credit card business, buying and selling currencies, custodian business and cash management services. The main problem with banks nowadays is, that a lot of them have abandoned their traditional role as providers of long-time financial products, in favour of short-time gains that carry much higher risks.

During the financial boom, most major banks adopted financial constructs that were barely comprehensable and did their own trading in habit to make fast money, and earn their executives and traders millions in bonuses. This was nothing short of gambling and damaged whole economies and societies. Like back in 2008, when banks like Leeman Brothers gave credit to basically anyone who wanted to buy a house, and thereby put the bank in an extremely dangerous risk position. This led to the collapse of the housing market in the US and parts of Europe, causing stock prices to plummet, which eventually led to a global banking crisis, and one of the largest financial crises in history.

Hundreds of billions of dollars just evaporated. Millions of people lost their jobs and lots of money. Most of the world's major banks had to pay billions in fines and bankers became some of the least trusted professionals. The US government and the European Union had to put together huge bailout packages to purchase bad assets and stop the banks from going bankrupt. New regulations were put into force to govern the banking business, compulsary bank emergency funds were enforced to absorb shocks in the event of another financial crisis. But other pieces of tough new legislation were successfully blocked by the banking lobby

Today, other models of providing financing are gaining ground fast. Like new investment banks, that charge a yearly fee and do not get commissions on sales, thus providing the motivation to act in the motivation in the best interests of their clients. or credit unions - cooperative initiatives that were established in the 19th century to circumvent credit sharks. In a nutshell, they provide the same financial services as banks, but focus on shared value rather than profit maximisation. The self proclaimed goal is to help members create opportunities like starting small businesses, expanding farms or building family homes while investing back into communities.

They are controlled by their members, who also elect the board of directors democratically. World wide, credit union systems vary significantly, ranging from a handfull of members to organisations with several billion US-Dollars and hundreds of thousands of members. The focus on benefits for their members impacts the risk credit unions are willing to take, which explains why credit unions, although also hurting, survived the last financial crisis way better than traditional banks. Not to forget the explosion of crowdfunding in recent years. Aside from making awesome video games possible, platforms arosed that enabled people to get loans from large groups of small investors, circumventing the bank as a middle man.

But it also works for industry - lots of new technology companies started out on kickstarter or indiegogo. The funding individual gets the satisfaction of being part of a bigger thing, and can invest in ideas they believe in. While spreading the risk so widely, that, if the project fails, the damage is limited. And last but not least, micro credits. Lots of very small loans, mostly handed out in developping countries that help people escape poverty. People who were previously unable to get access to the money they needed to start a business, because they weren't deemed worth the time.

Nowadays, the granting of micro-credits has evolved into a multi-billion dollar business. So, banking might not be up your street, but the banks' role of providing funds to people and businesses is crucial for our society and has to be done. Who will do it and how it will be done in the future is up for us to decide, though.

How Does the Stock Market Work?
In the 1600s the Dutch East India Company employed hundreds of ships to trade gold, porcelain, spices, and silks around the globe. But running this massive operation wasn’t cheap. In order to fund their expensive voyages, the company turned to private citizens– individuals who could invest money to support the trip in exchange for a share of the ship’s profits. This practice allowed the company to afford even grander voyages, increasing profits for both themselves and their savvy investors.

Selling these shares in coffee houses and shipping ports across the continent, the Dutch East India Company unknowingly invented the world’s first stock market. Since then, companies have been collecting funds from willing investors to support all kinds of businesses. And today, the stock market has schools, careers, and even whole television channels dedicated to understanding it. But the modern stock market is significantly more complicated than its original incarnation. So how do companies and investors use the market today? Let’s imagine a new coffee company that decides to launch on the market. First, the company will advertise itself to big investors. If they think the company is a good idea, they get the first crack at investing, and then sponsor the company’s initial public offering, or IPO. This launches the company onto the official public market, where any company or individual who believes the business could be profitable might buy a stock.

Buying stocks makes those investors partial owners in the business. Their investment helps the company to grow, and as it becomes more successful, more buyers may see potential and start buying stocks. As demand for those stocks increases, so does their price, increasing the cost for prospective buyers, and raising the value of the company's stocks people already own. For the company, this increased interest helps fund new initiatives, and also boosts its overall market value by showing how many people are willing to invest in their idea. However, if for some reason a company starts to seem less profitable the reverse can also happen.

If investors think their stock value is going to decline, they’ll sell their stocks with the hopes of making a profit before the company loses more value. As stocks are sold and demand for the stock goes down, the stock price falls, and with it, the company’s market value. This can leave investors with big losses–unless the company starts to look profitable again. This see-saw of supply and demand is influenced by many factors. Companies are under the unavoidable influence of market forces–such as the fluctuating price of materials, changes in production technology, and the shifting costs of labor.

Investors may be worried about changes in leadership, bad publicity, or larger factors like new laws and trade policies. And of course, plenty of investors are simply ready to sell valuable stocks and pursue personal interests. All these variables cause day-to-day noise in the market, which can make companies appear more or less successful. And in the stock market, appearing to lose value often leads to losing investors, and in turn, losing actual value. Human confidence in the market has the power to trigger everything from economic booms to financial crises. And this difficult-to-track variable is why most professionals promote reliable long term investing over trying to make quick cash.

However, experts are constantly building tools in efforts to increase their chances of success in this highly unpredictable system. But the stock market is not just for the rich and powerful. With the dawn of the Internet, everyday investors can buy stocks in many of the exact same ways a large investor would. And as more people educate themselves about this complex system they too can trade stocks, support the businesses they believe in, and pursue their financial goals. The first step is getting invested.

Top 10 Ways to Make Money Online

Are you tired of the 9-to-5 routine? Did our Worst Jobs video do nothing to make you feel better about your current employment? We may be able to help you, as always, with another great installment! This time, we’re tackling the top ten real ways you can make money online! These may not replace your full-time job immediately, but with a little time, patience and imagination, you could go create a career out of the comfort of your own home!

10. Online Psychic and Tarot Readings
Regardless of what you believe, there are those out there that swear by astrological readings, tarot cards, and psychics. That also means there are people out there that would pay others to provide said services, turning what some would consider ludicrous into a viable business. Via websites like Kasamba.com, alleged psychics can sign themselves up for paid live chat sessions and charge a specific amount per minute. Tarot readings are a bit more complicated to get started in, mostly because there are so many free services offered, but Craigslist has proved a viable starting point before moving onto your own online tarot reading service.

9. Online Surveys
Ever wonder how some companies make the decisions they do? Sometimes it’s an internal decision based off of figures and estimations, but consumer opinion can be a big part of change; but where would those opinions come from and how do  hey coax people to take the time to do a survey? Well, with online surveys and cash money, of course! There are plenty of websites that offer compensation for surveys, so much that the market is getting pretty saturated, but some sites are a bit more generous than others. If you aim to make some extra cash through online surveys, recommended sites include SwagBucks.com, OpinionOutpost.com, and Toluna.com, or for Android users, the app Google Opinion Rewards is a great way to earn a few bucks towards your Google Credit account.

8. Online Focus Groups
Like online surveys, online focus groups allow for convenient consumer and political research, but they require a bit more from the participants than clicking a few radio buttons. Rather than gathering a group of people in one location, though, everything is done in an online forum. As there isn’t much of an inconvenience to participants, not every online focus group pays, but if you’re looking for a quick buck, FocusGroup.com is a valuable resource. A moderator will steer the discussion, which is held over a web-based technology like WebEx and GoToMeeting, and you won’t have to deal with the awkwardness of face-to-face  iscussion.

7. Etsy
Feeling crafty and don’t know what to do with those 25 scarves you crocheted? You can try your luck at an arts and crafts show, spend the money to secure a table, and enjoy the blistering heat, or you can simply open an Etsy shop and sell your handmade product from the comfort of your own home. Members of the eCommerce site specialize in handcrafting unique items, leading to a community of over 1.6 million sellers and $2.39 billion in annual sales in 2015 alone. Additional to arts and crafts, Etsy also allows shops to carry vintage and antique items that are at least 20 years old.

6. eBay
Have a lot of junk that you think may be worth something? Since 1995, the online auction house has proved to be a fine means of unloading your unwanted stuff. While you’re free to sell just about anything you can find, those that have the potential to make the most money tend to either focus on limited collectibles, antiques or open their own eBay Store and specialize in stocking and selling anything from clothing to electronics to niche items like, uh, erotic postcards. One of the best ways to find stuff to sell on eBay is by visiting local thrift stores, garage sales and estate sales. Be sure to bring a device with an internet connection so you can price-check your lucky finds before you buy them!

5. Owning or Building a Website
Have a service you think you can offer? Is your mind filled with things that you’d love to throw out for the world to read? Think you have the know-how to turn an online space into an advertising mecca? You may want to shell out the minimal start-up cash to build yourself a website. Making money from a website is a long-term endeavor that takes a lot of patience and time, but if the formula can be perfected, your bank account can grow from ad revenue. If you are the creative type and know your way around Wordpress, or even better, can code, there are plenty of small brick-and-mortar and service companies looking to have a website built, and will often pay in the $1,000's.

4. Virtual Assistant
Thanks to the wonders of the internet, some jobs are able to leave the office setting and be done from the convenience of your home. One position, which offers the perks of a home setting and independence, is a virtual assistant. Much like an in-office assistant, virtual assistants act as a sort of liaison for a higher-up employee, scheduling meetings, fielding phone calls, performing research and record keeping, and partaking in conference calls and online meetings. Via e-mail, telephone calls, and online meeting software, virtual assistants communicate with fellow employees and not once do they need to slip into high heels or throw on a tie to get the job done.

3. Online Tutoring
Maybe you’ve pursued a career in teaching but find that it’s not at all what “younger you” thought it was cracked up to be. Maybe you’re in between teaching jobs or are just waiting for summer break to end. Whether the situation, your schooling doesn’t have to go to waste, especially not with online tutoring as a feasible alternative. Cutting out the need to deal with children in a face-to-face setting, online tutoring allows you to use your educational background to help people of all ages with homework, basic and advanced test prep, and general coursework. Even if you’re still pursuing a degree, so long as you’re a Sophomore in a 4-year degree program, sites like Tutor.com will consider you for an online tutor position.

2. Freelancing
If you have an ability to create something others may struggle with, such as an informative piece of writing, beautiful graphic logo, or piece of music, you could have a future as an online freelancer. Typically, freelancers are responsible solely for content, whether it be a company logo, website design or podcast theme song. Just knowing how to create something is one part of the battle as marketing yourself and finding clients can be far more frustrating and time-consuming. Websites like PeoplePerHour, Upwork.com, Fiverr.com and FlexJobs.com are vital resources for starting freelancers looking to remain and succeed in an online setting.

1. Own a YouTube Channel
It’s true, you can make quite a bit of money by owning and operating your own YouTube channel. What isn’t true is any inkling you may have that it’s easy to do. Many different factors go into what makes a YouTube channel successful, first and foremost being whether or not the idea is original and appealing. Though that doesn't mean you need any talent or expensive equipment, there are plenty of channels that have started or continue to use sub-par equipment, yet have a huge following. YouTube GradeAUnderA is a prime example - a channel that went from 50,000 to 2.8 million subscribers in just one year, utilizing only Microsoft Paint and Movie Maker to make his videos. YouTube is all about creativity and finding an audience that enjoys your content. Chances are if you find something funny, entertaining or educational, then someone else will too - so don't be afraid to start creating content and starting your career path on YouTube!

10 Legit Ways to Make Money and Passive Income Online
Did you know you can actually make money online? yeah that’s right, and all you need is a computer or phone with internet access. So in this video, I’m going to show you 10 websites where you can actual start making some side cash or if you are really serious, some good Money! isn’t that amazing! On some of these websites you can actually make as much as a 100 dollars a day or even  more, and the best part is, you don’t have to quit your 9 - 5 job, you can make this money, working in your free time. On the internet, there are two distinct ways of making money. The first way is active income. With active income, its like your normal 9 -5 job. You only get paid for the work you do. If you do not work, you don’t make money, as simple as that. The second way is through passive income. This is my favorite method because, with active income, all you do is put in the work once, and the money in theory should keep rolling in, without you having to do any more work other then maybe promoting what you have made, or in some cases what other people have made. So let’s get to the video.

1. upworks.com
Upworks is a website for freelancers. With upworks you are making acvtive income. businesses and individuals post services on upworks that they would like to outsource such as article writing, video editing, app development, coding, there tons of jobs and services being outsourced on upworks… The beauty of all this is its low barrier of entry, you just have to be good at something.  If there is something that you are good at maybe graphic design or coding or just about  any skill, head over to upworks and start making some Money. Here's a tip if you are considering working on upworks, have a robust profile that looks good. This will drastically increase your likelihood of ever receiving job offers, from potential clients. Displaying your best work or highlighting specific experience can and will help you stand out.

2. YouTube
Not a lot of people know this but, you can actually make money with YouTube. If you are considering getting into YouTube to make money, make sure you understand one thing clearly. Thanks to the new rules, if you are planning on starting a brand new channel from scratch, you first have to reach the YouTube minimum threshold to get monetized. Which is you will need 4000 watch hours, and 1000 subscribers in the last 12 months. Once you have reached that, you can get monetized, how much can you make on YouTube? Honestly as much as you want! As long as you keep uploading good content that people are willing to watch your golden, and the longer the video the more money you can expect to make… you can make anywhere from 1$ to thousands even hundreds of thousands of dollars. The more views you are getting, the more money you can expect to make, and also you get more subscribers! With YouTube, what you are earning is passive income, make a few videos and they should keep making you money consistently. You can also make money with YouTube through paid sponsorships, but with paid sponsorships you will need a large audience, usually a minimum of 10k subs to do that. You can also make money through affiliates, but we will get to that later.

3. Amazon
Although Jeff Bazos, did start off the company selling books, amazon now sells almost anything you can think of. It’s not just a site for buying your favorite toys though, you can actually make money with amazon. And here’s three ways you how… The first way is Amazon Mturk – Mtruk is kind of like upworks, it’s a place where businesses outsource work that is too difficult for a computer program to do. Such as audio editing and transcribing, translating audio and video from different languages, testing webpages, writing reviews, and a whole lot of other services. You can make as much as $20, $30 an hour, by working on a few different tasks. This is a legit may of making money, and they do pay. This is active income though.

The second way is Amazon kindle publishing. Turn your ideas into an eBook and make money today. Every time you buy an ebook from amazon, amazon and the publisher make money, and you can too. The thing with kindle publishing is… you first need a book to sell. You can either write this book yourself or you can hire someone to write it for you. You don't have to be an established author, or find a publishing company to do this. You can actually do this from the comfort of your home and start earning some passive income. Sounds awesome right? and the best part is, it’s absolutely free, so sign up and start making some money.

Amazon takes care of the money handling shenanigans… and you can sit back relax on your couch, while making some good old… passive income. If you are really interested in kindle publishing, I highly recommend you do more research on this topic. You can find free videos and tutorials right here on YouTube that will teach you the basics. If you want expert advice, you might have to first pay for a course. I will link a really good one in the description, if you are interested. Some people make over $100,000 publishing Kindle e-books on Amazon. It’s definitely a market to look into. The third way is Amazon associates program.

This is a very popular and easy way of earning passive income. All you do is sign up to the amazon associates program which is free, than you can pick from thousands of stuff amazon sells on their website and start promoting. Amazon will give you a special link, and every time someone buys through your link, amazon will give you a commission anywhere from 5 – 10% of the sale. Amazon will pay you 60 days after a purchase and you can chose to be paid either through amazon gift cards, wire transfer to a bank account – although this is currently only available in the US but if you live outside America you can be paid via cheques, or you can have the money transferred to your amazon account and start buying stuff with it.

4. clickbank
Clickbank is a marketplace for product creators and affiliates to make money online buy selling their courses or services to the world. Clickbank only sells digital products, but the beauty about clickbank is that the, commission payout is so much higher than that of Amazon. Some affiliates pay you as much as 75%, for selling their services, while others pays as low as 5%, so keep that in mind. But with that said, you can make some really good money on clickbank, hundreds or even thousands of dollars. Simply head over to clickbank, pick something to sale and start making money.

5. flippa.com
Flippa is the number one marketplace for buying and selling online businesses. It attracts a huge audience, and it offers great tools to increase visibility, it’s an auction site really much like eBay, for those selling and buying digital assets, such as websites, apps, domains, shopify stores and amazon FBA accounts. If you are good at making apps or even websites… you can actually sell it online and make some money. Or better yet, if you have some money lying around and you are interested in buying either websites, apps, or ecommerce stores… that are already making money, you can do so with flippa. What happens is, you place a bid, much like eBay and if your bid is the highest, then congratulations because you just bought yourself an online business. You can also make money by selling online businesses. So that’s flippa for you.

6. Shutter stock
Basically shutter stock is a platform where you can buy or sell digital media. Such as pictures, music and video clips. Mainly created by freelancers and third parties, so if you might be particularly good at photography taking amazing pictures and videos. Or really good at making sick beats, you can monetize your talent on shutter stock. The way you make money with shutter stock is every time some purchases one of your pictures, you get paid a commission, usually a couple cents to a few dollars, if you are lucky. The trick to making a lot of money with shutter stock is to consistently keep uploading high quality images.

7. Rover
Do you like pets? Dog in particular? If so, then you should probably check out rover. Rover is a dog sitting service, but this is currently only available in the US and Canada. So if you live in any of those two countries then you can register as a dog sitter, and get paid for babysitting dogs. You can make anywhere between 80 - $100 a night, just by watching someone’s dog! You can literally make hundreds of dollars a week by just babysitting someone’s pet. Now how about that for a deal?!

8. Takelessons.com
Take lessons is a website where you can teach any skill. Everyone has a skill, that they can teach, whether that might be, teaching someone a language, how to cook, how to play a musical instrument, how to solve complex math equations…any so much more. Anything that you think someone else might not know, you can teach people on takelessons, and start making money.

9. Fiverr
You have probably heard of fivver mentioned a lot of times, because it’s a simple and easy site to start making money. But if you haven’t, basically it’s a freelance website where you can literally outsource anything and I mean anything… as long as its legal, for as little as $5 There are so many different ways to make money on fiverr, just to name a few. You can do animations, Logo Design, Packaging Design, Web & Mobile Design, Social Media Design, Photoshop Editing, Architecture & Floor Planning, 3D Models & Product Design, T-Shirts & Merchandising, SEO and so much more. If there is anything that can be outsourced, you can most likely find it on fiver. Head over and check out fiverr guys, it a legit of making money.

10. Drop shipping
With drop shipping, what you are basically doing is selling someone else stuff for a small or large profit without having to deal with the shipping. So basically you are acting like a broker or a middle man. You can do this by opening up a shopify store and then linking it up with oberlo. Oberlo is basically an app that integrates with shopify, and it is what a lot of people use to source for stuff that they would like to sell on their stores. The basic principle of drop shipping is, you create a store or any channel where people can buy stuff from you. Then once they buy something from you, you pay the manufacturer, usually for a lot less then what you got it for, and then have the manufacturer ship it to the customer. All without you ever seeing or touching the product.

The best part of drop shipping is that you set your own price of the product you want to sell, then take the profits and pay the manufacturer the rest. So yeah that’s drop shipping in a nutshell. If you are interested in drop shipping, there are a ton of tutorial here on YouTube, that will show you the step by step guide of creating your store, finding products, advertising, finding influencers, and finally shipping and getting paid. It’s a bit complicated to start, especially in the beginning, but you can make a ton of money… with drop shipping. With that said, thank you for watching guys, please subscribe, enable notification and I will see you on the next one.