đź’¬ "What if I told you that $1,700,000,000,000 in student loan debt was created literally out of thin air?"
Let’s pull back the curtain on one of the biggest financial illusions shaping our daily lives. Most people think banks simply lend out the money you deposit. But here's the truth: banks create money when they issue loans—a process called [fractional reserve banking]. Your $100 deposit could help generate thousands of dollars in new money, fueling the larger economic system.
Take Sarah, a nursing graduate with $45,000 in student loans. Every month, she skips meals to make her $400 payment, not realizing her struggle funds a retiree’s comfort halfway across the globe. That’s because her loan payments journey through servicers, investors, and financial markets—feeding a system designed to profit from her debt, not help her escape it.
And here’s the most surprising part: physical cash only accounts for 11% of the money supply. The other 89% exists only as digital numbers, created when banks approve loans. This hidden process underpins everything from your mortgage to global financial markets.
So, what can you do with this knowledge? Start by taking control of your financial future:
→ [Learn how money creation works]: Understanding how loans create money will change how you approach debt.
→ [Diversify your finances]: Spread investments across different asset types and geographies to reduce risk.
→ [Track economic trends]: Watch interest rate cycles and inflation to time big financial decisions.
→ [Build resilience]: Create tiered emergency reserves to weather economic storms.
→ [Commit to financial literacy]: A few hours a month can lead to smarter decisions and long-term wealth.
The system is complex, but knowledge is your superpower. The more informed you are, the better you can navigate these invisible forces that quietly shape your finances.
What’s one financial insight that changed the way you think about money? Let me know in the comments! ⬇️
Personal Finance in 3D - Dollar Dreams Decoded
đź’¬ "What if I told you that $1,700,000,000,000 in student loan debt was created literally out of thin air?"
Let’s pull back the curtain on one of the biggest financial illusions shaping our daily lives. Most people think banks simply lend out the money you deposit. But here's the truth: banks create money when they issue loans—a process called [fractional reserve banking]. Your $100 deposit could help generate thousands of dollars in new money, fueling the larger economic system.
Take Sarah, a nursing graduate with $45,000 in student loans. Every month, she skips meals to make her $400 payment, not realizing her struggle funds a retiree’s comfort halfway across the globe. That’s because her loan payments journey through servicers, investors, and financial markets—feeding a system designed to profit from her debt, not help her escape it.
And here’s the most surprising part: physical cash only accounts for 11% of the money supply. The other 89% exists only as digital numbers, created when banks approve loans. This hidden process underpins everything from your mortgage to global financial markets.
So, what can you do with this knowledge? Start by taking control of your financial future:
→ [Learn how money creation works]: Understanding how loans create money will change how you approach debt.
→ [Diversify your finances]: Spread investments across different asset types and geographies to reduce risk.
→ [Track economic trends]: Watch interest rate cycles and inflation to time big financial decisions.
→ [Build resilience]: Create tiered emergency reserves to weather economic storms.
→ [Commit to financial literacy]: A few hours a month can lead to smarter decisions and long-term wealth.
The system is complex, but knowledge is your superpower. The more informed you are, the better you can navigate these invisible forces that quietly shape your finances.
What’s one financial insight that changed the way you think about money? Let me know in the comments! ⬇️
#FinancialLiteracy #MoneyCreation #BankingSystem #StudentLoans #EconomicInsights
6 days ago | [YT] | 0