Money Game 101

Exposure to the elements can kill you over time... underexposure can do the same.

It's easy to make money when you have money. Hard to make money when you don't have money. Put your money to work so you don't have to work as hard, the problem with that approach is not many people know how. Welcome to Money Game, where we learn the rules to put your money to work for you. That's all it is... a game, and once you learn the rules you'll be on the board.

Key Terminology To Help You Navigate the Game

TermDefinitionExample
StockA stock represents a fractional ownership in a corporation. When you buy stock in a company, you become a shareholder, meaning you own a portion of that company.I go to my broker and purchase 1 share of Coca-Cola (KO) @ $72 and now own part of Coca-Cola.
BondA bond is a debt instrument, essentially an IOU, where the issuer (like a company or government) borrows money from an investor for a set period, promising to repay the principal amount plus interest.I go to treasury direct to buy bonds from the government and loan the government money for a set period of time. At the end of that period of time, they pay me interest (2.7%) for the loan.
ETFAn ETF is a basket of different securities, like stocks, bonds, and commodities, that trades on a stock exchange.I go buy SPDR S&P 500 ETF Trust online and own a small amount of each company in the S&P 500.

Company Communications:

TermDefinitionTakeaway
Earnings ReportAn earnings report, also known as an income statement, is a financial document that summarizes a company's profitability over a specific period, typically a quarter or year.Companies have meetings with shareholders to discuss the profitability and obstacles of a business. This happens in a timely manner and can be seen on the company website.

With regard to Stocks:

TermsDefinitionTakeaway
EPS (Earnings Per Share)


EPS, or Earnings Per Share, is a financial metric that indicates how much profit a company generates for each outstanding share of its common stock. It's a key measure of a company's profitability and is widely used by investors to assess a company's financial health


A good EPS (Earnings Per Share) for a stock is generally considered to be one that is increasing over time, especially when compared to the same period in the previous year.
P/E (Price to Earnings RatioThe Price-to-Earnings (P/E) ratio is a valuation metric that compares a company's stock price to its earnings per share (EPS).A good P/E (Price-to-Earnings) ratio is relative and depends on various factors, but generally, a lower P/E ratio is considered better, as it suggests a stock may be undervalued thus has potential to grow.
DividendA dividend is a portion of a company's profits that are distributed to its shareholders, typically in the form of cash or additional shares of stockA stock that starts the year at 10 dollars and finishes at 12 dollars with a 20 cent quarterly dividend ends up with 12.80 at the end of the year. The buyer gains both the 2 dollar increase in market value and also the 20 cent distribution.
BetaBeta (β) is a measure of an investment's volatility and risk in relation to the overall market. Beta of 1 means the investment moves in sync with the market, a beta greater than 1 indicates higher volatility, and a beta less than 1 suggests lower volatility than the market.The USD index carries a beta of greater than 3 which makes sense because NVDA and AVGO have been moving aggressively up the past several months.

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June 24, 2025 at 5:08 AM
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