Understanding Finance/Economics for idiots

deaglan1

Hi all, I believe that I am reasonably able to understand everyday issues - if I have a car problem I will bring it to a mechanic, if I am sick, I will go to the doctor, I know that if one team gets more goals than another they will be deemed the winners, if I have no money I cannot do very much - BUT I DO NOT UNDERSTAND FUNDAMDENTAL FINANCIAL CONCEPTS - I find it all very abstract. e.g. what defines how "wealthy" a nation is? What defines how much money there is in an economy? If a central bank can make money out of thin air, how do they inject this into an economy and ultimately why do they do it? So what I am really asking is: is there a sure fire explanatory book or internet site for the financially challenged that explains the nuts and bolts of economics. I simply do not get it.

unclebill98

http://www.boards.ie/vbulletin/forumdisplay.php?f=544

Or

Google.

ridelm

I think those are very good questions especially this one :
how do they inject this into an economy and ultimately why do they do it?

That's not something that is clearly explained in Google. But from what I heard, banks can just print money on demand when they accept mortgage from their customer. They have to have 10% in cash of all that money.

I'd like to understand more accurately how it works too.

later12

This thread title reminded me that I always find the ''<insert subject> for dummies'' to be a slightly taunting book title. I refuse to even pick up one of these books, since I am not an idiot, and I'm sure that you are not one either, OP. (In fact, one could argue that a bookshop is an unlikely purlieu for the cerebrally challenged. Real idiots never wish to improve their knowledge)

Anyway to get back to the OP's point. The first piece of advice I would suggest is to invest a few euro in copy of some mainstream publication like The Economist or The Financial Times, or some free online site like VoxEU, and for any terms which you do not understand, consult wikipedia or Investopedia liberally. Or, if you are still not satisfied, feel free to ask for explanations on here.

I can think of no better way to gain a practical understanding of economics than by reading economic and financial news literature. The Financial Times was my first dip into the world of economics and finance when I was an economically illiterate 17 year old, and its pink pages have done more for my understanding - and more importantly, eternal confusion - than any single textbook or lecturer ever has.

As for textbooks. There are books like Debunking Economics, which I haven't read, but which everybody who has done so seems to recommend. There is also an Economics Resources thread here in the economics forum with lots of links which you may find useful, and indeed, there is the economics forum itself, for any questions or ideas you may wish to share.

But personally, my biggest tip would be to give yourself a few weeks with investopedia and the FT and, with enough of an interest, you'll be thinking about everything from Assymetric shocks to J-Curves to Zero Sum Games in your sleep. You might want to watch out for that one, actually...

Hal Emmerich

later10 wrote: »

This thread title reminded me that I always find the ''<insert subject> for dummies'' to be a slightly taunting book title. I refuse to even pick up one of these books, since I am not an idiot, and I'm sure that you are not one either, OP. (In fact, one could argue that a bookshop is an unlikely purlieu for the cerebrally challenged. Real idiots never wish to improve their knowledge)

Anyway to get back to the OP's point. The first piece of advice I would suggest is to invest a few euro in copy of some mainstream publication like The Economist or The Financial Times, or some free online site like VoxEU, and for any terms which you do not understand, consult wikipedia or Investopedia liberally. Or, if you are still not satisfied, feel free to ask for explanations on here.

I can think of no better way to gain a practical understanding of economics than by reading economic and financial news literature. The Financial Times was my first dip into the world of economics and finance when I was an economically illiterate 17 year old, and its pink pages have done more for my understanding - and more importantly, eternal confusion - than any single textbook or lecturer ever has.

As for textbooks. There are books like Debunking Economics, which I haven't read, but which everybody who has done so seems to recommend. There is also an Economics Resources thread here in the economics forum with lots of links which you may find useful, and indeed, there is the economics forum itself, for any questions or ideas you may wish to share.

But personally, my biggest tip would be to give yourself a few weeks with investopedia and the FT and, with enough of an interest, you'll be thinking about everything from Assymetric shocks to J-Curves to Zero Sum Games in your sleep. You might want to watch out for that one, actually...

The dummy books are very good actually, I've bought a few.

Just make sure it's the latest edition of whatever it is your buying.

HowFinancial

Hi deglan1,

I run a blog (HowFinancial) which may be of some help to you. I set it up to help explain finance issues. The article "rocky road ice cream for investors" in particular springs to mind, and may help you with some of the queries in your post as it goes into the concept of interest rates, and some of the impacts on the economy (in a fairly tongue & cheek way).
If you have any particular economic queries feel free ask.
I hope the information there is of some help!

andrew

To chime in; if you're using the internet to learn about economics, take anything that claims to be 'Austrian' economics with a massive pinch of salt. All the useful bits of Austrian economics have been incorporated into mainstream economics already, and what's left of it on the internet is a morass of nice sounding nonsense.

click_here!!!

The for Dummies books are great. If you are offended by the title then you're too easily offended.

The Economist doesn't really contain much useful introductory economics, I believe. It's a weekly newsmagazine which seems to go into too much detail on the politics of obscure countries or trends in retailing – i.e. not what you're looking for. Related satire about this

I agree with what Andrew said about Austrian economics. On the internet, there is alot of opinion presented as fact. Austrian is in some sense the opposite of Marxian economics and both are very ideologically driven. If an economic concept were true enough and important enough, it'd be in an introductory textbook. You can then branch out into opinions, etc when you understand stuff. Stay away from wild conspiracy theories too. ;D

noodler

I reccommend one of these

http://www.bookdepository.co.uk/Quick-Win-Economics-Stephen-Kinsella/9781904887607

http://www.economist.com/research/economics/alphabetic.cfm?letter=G

I bought a good Economist A-Z book once but it doesn't seem to be on thei ronline store (bought in Easons O'Connell St downstairs) - maybe they chnaged the name to just "Economics".

They aren't textbooks and use less abstract explanations.

later12

I know the OP's question is not necessarily related to the European crisis, but if anyone is interested, pg. 10 of today's FT is a nice feature with a concise breakdown of the 5 major problems facing the Eurozone, giving you everything you need to know in relation to what the problem is, what the solutions might be, and who is or is not in favour of such solutions, and why.

No previous knowledge of economics or finance is required.