Explainers
Explainers
An explainer answers a "why does this happen" question about money: the mechanism, what makes it larger or smaller, and where the reasoning stops. It reaches no verdict about any product and needs no figures of your own.
Published explainers
Personal finance
Why Crossing a Threshold Can Leave You With Less
A rule that starts at a boundary applies either to the amount above the line or to the whole amount. Which one it is decides whether the line bends or breaks, and whether one more unit can cost more than it earns.
Last reviewed
Investing
Securities Lending Inside a Fund Explained
A fund can lend the securities it holds for a fee, and that fee is split with a lending agent. Neither your share of it nor the counterparty and collateral risk you take for it appears in the ongoing charge.
Last reviewed
Investing
Nominal Return vs Real Purchasing Power
Why a rising balance can still be a weaker outcome, why subtracting inflation from a return is only an approximation, and why money paid in over twenty years cannot be compared with a figure in today's money.
Last reviewed
Business
Markup, Gross Margin and Contribution Margin Explained
Why the same price can be a 40% markup, a 28.57% gross margin and a lower contribution margin again — and why two reputable sources can report different margins for identical figures without either doing the arithmetic wrongly.
Last reviewed
Crypto and DeFi
Staking Rewards, Fees and Token Dilution Explained
Why staking can increase a token balance without increasing your share of the supply, how APR, APY and reward fees differ, and why ownership is a division rather than a subtraction.
Last reviewed
Real estate
Why Gross Rental Yield Is Not Cash Flow
Why a property can show an attractive gross yield and still produce weak or negative monthly cash flow, what sits between the two, and what positive cash flow still does not prove.
Last reviewed
Investing
How to Compare Two Uses of Money Without Fake Certainty
Why opportunity cost only exists relative to a real alternative, what makes a comparison like-for-like, why a higher annual rate can start behind, and why the option that ends higher is not automatically the one to choose.
Last reviewed
Personal finance
Why Liquidity Is Not the Same as Net Worth
Why an asset can add to your net worth and still be no help in an emergency, what access time and sale friction actually cost, why a usable share is your assumption rather than a valuation, and why holding more cash has a price of its own.
Last reviewed
Investing
Why Losses Require Disproportionately Larger Gains
Why a percentage loss and the same percentage gain never cancel, why getting back to the old balance is not the same as getting back to the original plan, and why the size of a loss is not a reason to keep holding.
Last reviewed
Investing
How Investment Fees Compound Into Lost Wealth
Why a small annual investment fee can create a much larger long-term difference, why the second component of that difference is signed, and where the arithmetic stops.
Last reviewed