To Ride a Bus

The Bus (yes the one you pay a fare to get a ride, that one) is my passport to adventure. Once I plonk my ass down on the seat and play my music, I'm transported from a participant to an spectator. It detaches me from life and I seem to be watching other life stories roll past as I look out the bus window (assuming I get the window seat). It gives me a chance to reflect on the simple things in life, admiring the fluffy clouds or the hot babe that just sashayed past me (mostly admiring the babe) and it was on one such trip that I realized I've ignored the simple things of Sense n Cents.

In my previous post I blabbered on and on, thinking that I was on a roll, without caring to explain any of the financial jargons I've used. So this time, let us strip (woohoo!) to the basics. Sticking to the essence of this blog, I will neither attempt to go into details, nor will I be politically correct.

In the crazy financial markets, there are often many terms that refer to the same thing, its almost like they (crazy people working in financial markets) want to prevent anyone from understanding anything they say. To me, a bus is a bus is a bus.

Unit Trusts / Mutual Funds. There is actually a slight difference between these 2 but when most financial professionals use them interchangeably, the difference is probably not that different. Well, here's how they work. They get many money from many people in many countries. Then they buy many stocks in many companies in many countries thereby forming a fund. Finally, they put someone in charge of monitoring the fund and call him the Fund Manager.
So it achieves 2 goals for the investor (that's you). Firstly, risk is diversified (by buying so much in so many). Secondly, costs are kept low (compared to you buying that many stocks in that many countries individually). Incidentally, it also achieves 2 goals for the Fund Manager. Firstly, he gets a job. Secondly, he gets paid. Very well. Hence, mutual funds are mutually beneficial.

Stocks/ Equities/ Shares. Once again, a bus is a bus is a bus. My guess is everyone knows what stocks are, so everyone knows what equities are and so everyone knows what shares are. For the lesser-informed, buying a share of a company is buying a share of it and you get to share its profits!

There it is, stripped to its core and allow me to explain the key term of this post: The Bus. A form of transport for some, an enjoyable ride for others but when stripped to its core,

“A bus is a vehicle that runs twice as fast when you are after it as when you are in it”

Related Posts:
Option to ride
Option to ride II
Getting hot around the collar