What is the cost of capital? Basically the idea is there is typically for some sort of monetary or cash investment you gotta make into something come up before it actually makes a real yield.
for example let us say that you want to invest in real estate, flip it or whatever, so like buying something in all cash, and then you have to have the cost to capital in order to raise down and bulldoze the old property, spend a bunch of money to actually build a new house, Pay for architects inspectors etc., put it on the market, pay for the real estate agents and the closing cost etc., and then you cop the profit after all that work.
The Magic of bitcoin, and also stocks like micro strategy is that there is no cost to capital. Which means you don’t really have to put any upfront capital in order to gain the yield. Instead, you just directly invest money into the thing, into the asset, and then it starts to immediately give you real yield!
Economics by KIM
- Price vs Value
- EVERYONE WINS!
- INVESTING PR’S
- The Philosophy of Investing
- ERIC KIM VENTURE CAPITALIST
- How to FIRE (Financial Independence Retire Early)
- How to *Save* a Million Dollars
- Increase Value
- MAYBE IT IS A GOOD IDEA TO BUY HIGH
- Banks Are the True Menace to Society
- THE PROMISE OF FUTURE MONOPOLY PROFITS?
- High gas prices are good
- What is Capitalism?
- Pride in What You Paid For
- On Making Money from Nothing
- Save Money Towards What Ends?
- No Regret Investment