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ETFs, index funds, compounding and long-term investing.
11 entries
1100s–1600s
Merchants pool money to send ships, and a share of a voyage becomes a share of a company.
Pacioli's Summa de arithmetica, printed in Venice in 1494, explained the double-entry method merchants used: every amount is recorded twice, as a debit and a credit, so the books balance and show what a business owns and owes.
The same book gives the rule of 72 for how long money takes to double at compound interest.
💡 Why it made sense then
Merchants with partners, agents and many voyages needed to know what they had paid for goods, what they owned and whether they were making money.
Ideas it gave us
Net worth is everything you own minus everything you owe.
🎮 Your net worth is your cash, savings, shares, options and farm plots at today's prices, minus any margin loan and short positions. The leaderboard ranks players by how much it grew this season.
Open the full entry →Cost basis is what you paid for an investment, including fees, used to work out your gain or loss when you sell.
🎮 Your portfolio shows the average cost of each position. When you sell, your gain is the sale price minus that average. A loss disallowed by the wash sale rule is added to the cost of the new shares.
Open the full entry →Compound interest is interest earned on both your original money and the interest it has already earned, so savings grow faster over time.
🎮 Savings at the bank earn interest daily, and interest earned stays in savings where it earns more, so it compounds.
Open the full entry →1600s–1790s
Shares trade in coffee houses and bourses, the first bubbles burst, and governments borrow from the public.
To pay for war with France, the English government borrowed £1.2 million from investors who formed the Bank of England in 1694. The government paid them interest year after year.
Government debt became something investors could hold for steady income and sell to others, the ancestor of today's government bonds.
💡 Why it made sense then
Governments needed large sums quickly, and lenders wanted a safe, regular income they could sell if they needed their money back.
Ideas it gave us
A bond is a loan to a government or company that pays the lender interest (the coupon) and returns the full amount (the face value) at a set date.
🎮 The game has no bonds. The nearest thing is savings at the bank, which pays a steady rate tied to the Federal Reserve's.
Open the full entry →Yield is the income an investment pays each year as a percentage of its price, such as a bond's interest or a stock's dividends.
🎮 Savings at the bank have a yield, shown as a yearly rate, and farm plots pay a daily harvest that works out as a yield on what you paid for them.
Open the full entry →1770s–1920s
Thinkers explain prices, trade and competition, while the telegraph and the ticker speed markets up.
On 26 May 1896, Charles Dow published an average of 12 industrial companies' share prices. One number could now sum up how the market was doing.
💡 Why it made sense then
Investors wanted a quick way to see whether the market as a whole was rising or falling.
Ideas it gave us
A market index is a number that tracks the combined price of a set group of stocks, such as the S&P 500 (500 large US companies), to show how that part of the market is doing.
🎮 Each game ETF is also an index of its group: its price tells you how that set of people is doing overall.
Open the full entry →Massachusetts Investors Trust opened in Boston in 1924. Anyone could buy in or cash out at the value of its holdings, giving small savers a share of a professionally chosen portfolio.
💡 Why it made sense then
Buying many different stocks cost more than most people could afford, and pooling money solved that.
Ideas it gave us
A mutual fund pools money from many investors to buy a portfolio chosen by a manager. Shares are bought and sold once a day at the fund's net asset value.
🎮 The game has no mutual funds, only ETFs, which trade any time at their live price.
Open the full entry →1929–1950s
The Great Depression leads to deposit insurance, securities law, margin rules and modern economic statistics.
Graham's book for ordinary investors (1949) described "Mr. Market", a moody partner offering prices every day, and recommended investing the same amount at regular intervals.
💡 Why it made sense then
Most people can't time the market, so a steady habit protects them from buying only when prices are high.
Ideas it gave us
Dollar-cost averaging means investing the same amount at regular intervals, whatever the price, so you buy more shares when prices are low and fewer when they're high.
🎮 You can dollar-cost average in the game by buying the same amount of a person or ETF every day, for example with your daily bonus.
Open the full entry →1950s–1990s
Risk gets measured, options get a formula, and index funds and ETFs bring the whole market to everyone.
In "Portfolio Selection" (1952), Harry Markowitz measured risk as the spread of returns and showed that combining investments that don't move together lowers risk for the same expected return.
💡 Why it made sense then
Investors already said "don't put all your eggs in one basket"; Markowitz showed how many baskets and which ones.
Ideas it gave us
Diversification is spreading money across many different investments so a loss on one has less effect on the whole portfolio.
🎮 ETFs let you invest in a whole group of people at once.
Open the full entry →A portfolio is the full set of investments a person or fund owns, such as stocks, funds, bonds and cash.
🎮 Your portfolio page shows your holdings, cash, savings, options and net worth.
Open the full entry →Asset allocation is how you divide a portfolio among types of investment, such as stocks, bonds and cash, based on your goals and tolerance for risk.
🎮 Your portfolio in the game mixes shares, ETFs, options, cash in savings and farm plots. How you split them is your asset allocation.
Open the full entry →Standard deviation measures how spread out a set of numbers is around its average. In investing, it's the usual measure of volatility.
🎮 The game measures each person's volatility as the standard deviation of their returns and uses it to price their options.
Open the full entry →Risk tolerance is how much loss or price swing an investor can accept, financially and emotionally, in pursuit of higher returns.
🎮 The house bots each have a different risk tolerance, from SafeBot, which trades rarely and carefully, to YoloBot, which trades often and aggressively. Their results on the leaderboard show how each approach plays out.
Open the full entry →Launched on 4 March 1957, the S&P 500 weights each company by its market capitalization, so bigger companies count for more. It became the most followed measure of the US stock market.
💡 Why it made sense then
Computers made it possible to calculate a broad index quickly, and weighting by value better reflects what investors actually own.
Ideas it gave us
A market index is a number that tracks the combined price of a set group of stocks, such as the S&P 500 (500 large US companies), to show how that part of the market is doing.
🎮 Each game ETF is also an index of its group: its price tells you how that set of people is doing overall.
Open the full entry →Market capitalization is the total value of a company's shares: the share price multiplied by the number of shares outstanding.
🎮 Every profile shows its market cap, and ETFs weight the people inside them by it.
Open the full entry →In 1964 William Sharpe (and others around the same time) showed that investors should be paid for risk they can't diversify away, measured by beta, on top of the risk-free rate.
💡 Why it made sense then
It gave investors a benchmark for whether a return was worth its risk.
Ideas it gave us
The capital asset pricing model says an investment's expected return equals the risk-free rate plus its beta times the market's extra return over that rate.
🎮 The game doesn't calculate CAPM, but the idea shows: listings that swing with the whole market should pay more to be worth holding than savings, which pay close to the risk-free rate.
Open the full entry →Beta measures how much a stock tends to move compared with the whole market: a beta of 1 moves with the market, above 1 moves more, below 1 moves less.
🎮 The game doesn't publish a beta, but you can see it at work: some listings rise and fall with the whole market, others move on their own news. ETFs tend to move like the group inside them.
Open the full entry →The risk-free rate is the return on an investment with no default risk, usually taken as the yield on short-term US Treasury bills. Every riskier investment should promise more than it.
🎮 The closest thing to a risk-free rate in the game is savings at the bank: insured up to $25,000 and paying a little under the Federal Reserve's rate.
Open the full entry →In 1976 Vanguard launched the First Index Investment Trust, which bought the S&P 500 instead of picking stocks, at a much lower fee. Critics called it "Bogle's folly".
💡 Why it made sense then
If most managers can't beat the market after fees, matching it cheaply leaves investors with more.
Ideas it gave us
An index fund is a fund that buys every stock in a market index, such as the S&P 500, in the same proportions, so it matches the market's return instead of trying to beat it.
🎮 Game ETFs work like index funds: each follows a group of people by a fixed rule and weights them by market cap, the way the S&P 500 weights companies.
Open the full entry →The expense ratio is the yearly fee a fund charges, as a percentage of the money you have in it. A 0.5% expense ratio costs $5 a year for every $1,000 invested.
🎮 A player who proposes an ETF earns its fund fee: 0.5% a year of what everyone holds in it, taken daily.
Open the full entry →The SPDR S&P 500 ETF began trading in January 1993. It held the index but traded on an exchange all day like a stock.
💡 Why it made sense then
Investors wanted index funds they could buy and sell any time, not just once a day.
Ideas it gave us
An ETF is a fund that holds a basket of investments, such as all the stocks in an index, and trades on an exchange like a single stock. One purchase gives you a slice of everything inside it.
🎮 Game ETFs hold whole groups of people (by category, country or political view), weighted by market cap and starting at $10.
Open the full entry →🎮 Practise with $10,000 in play money
Try it in a live 3D city with play money: trade shares in real public figures, get margin-called, pay your taxes and rob a bot or two. Free, and nothing real is at stake.
For learning only. This isn't financial advice.
