Voyages and the first shares · 1100s–1600s
1494
Double-entry bookkeeping is written down
Luca Pacioli describes how Venetian merchants keep their books, and includes the rule of 72.
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
Net worth is everything you own minus everything you owe.
- 📈 Cost basis
Cost basis is what you paid for an investment, including fees, used to work out your gain or loss when you sell.
- 🧺 Compound interest
Compound interest is interest earned on both your original money and the interest it has already earned, so savings grow faster over time.
Practise with $10,000 in play money
Free. No real money involved.