My First Step to a Successful Credit Score for Teens and Beginners

By Sweet Smart Books

Harnessing the basics of finance has become more important than ever before, but very few people know where to start and how to begin.

My First Step to a Successful Credit Score for Teens and Beginnersis all about mastering the basics of your personal finances and investing. With step-by-step guides for budgeting, understanding your credit score and ranking system, investing in crypto, stocks, and more, we have it all! The world of finances no longer needs to be a puzzle, and by the time you are done, you will have an understanding of the basics of boosting your credit score and improving your overall financial well-being. It also focuses on difficult matters such as debt, building a portfolio, and more!
And the best part? You don't need any prior financial knowledge! The pain of having to scrounge around in your dictionary is a thing of the past. Complicated terms and concepts are simplified in a way that anyone can understand.

So, don't hesitate and start reading your foundational financial guide today!

• Language: English
• Publisher: Sweet Smart Books
• Release date: Apr 10, 2022
• ISBN: 9781957945040

Book preview

Introduction

Finances are no easy feat. The financial process is filled with expectations, skills, and tricks to earn more money. Now that we are all entering the future, matters such as cryptocurrency and NFTs have risen to the surface. Terms such as brokers, charts, portfolios, budgets, credit, and debit tend to already overwhelm many people, as nothing is ever fully explained.

However, where do we start? What do we do? How can you build yourself a successful credit score as a teenager, and how can you start investing? How do you start working with crypto if you are interested in it? Is it as dangerous as people make it to be?

This book is all about finances and how to build yourself a successful financial foundation to take with you to adulthood. Whether you're a teenager or simply beginning with finance, you are in the perfect place.

Steering clear of technical jargon and formalities, this book simplifies finances and provides a simple, step-by-step guide to investing and trading. You don't need to have any prior knowledge of any of these subjects! All you need is some motivation and a little bit of courage to journey into a field that most people don't dare to go into.

However, finances and credit scores are important. You always hear it, but now it is time to understand why and apply it in your everyday life.

You will also learn how to set up a proper budget, how to tackle debt, and how to set up a proper portfolio. These are all foundational topics within the financial world. Budgeting is perhaps one of the most critical components of working with your own money, and portfolios are critical when planning for investments.

You need the right guide to walk you through everything. By the end of the day, you will have a solid knowledge of the financial basics. You will understand everything you need to know about credit scores and even how to start trading and investing. This book will also expand your cryptocurrency world, and perhaps you will finally begin to understand the news articles and conversations on investing that you hear around you.

Don't hesitate, and come with me on this incredible financial journey, walking through the basics, as well as the futuristic technology that has taken the world by storm.

Chapter 1: Understanding Cryptocurrency and How to Invest

The term ‘Bitcoin’ started to pop up in conversations a couple of years back, but very few people were truly aware of what it was and what it could do. Now, cryptocurrency has risen to the ranks of national headlines, becoming a trillion-dollar market industry that has had people reeling in both shock and delight. Many people have had their doubts about crypto, yet time and again, it has survived and is likely to remain relevant in the future.

However, cryptocurrency is the one topic very few people discuss in a straightforward manner. The majority of people still do not understand what cryptocurrency is and how it can affect the future. It holds much potential to invest and become an active part of the virtual community.

For anyone interested in investing in this potential future, making payments via cryptocurrency, or becoming a part of the crypto trading and mining world, you will need a proper introduction to this virtual coin.

Cryptocurrency Explained

A cryptocurrency is a form of virtual currency. It is electronic money, and no physical condition or design exists. The only reason there is a picture of a Bitcoin is purely because an artist designed the coin to give people a picture of a coin made of code.

A cryptocurrency is a form of exchange. You can make payments with it, or you can receive it. You can buy it on exchange platforms and invest in it. However, it shares a few key differences in comparison to fiat currencies. What are fiat currencies? They are the money that is regulated and backed up by the government. Classic examples of fiat currencies would be the US dollar, the South Korean Won, and the Indian Rupee. Fiat currencies can be worked on an electronic platform (typically within banks and other financial institutions), but they all represent coins and notes that physically exist and have been printed out. The government controls how many coins are created and how many new notes are printed and released into the country.

A cryptocurrency is purely an electronic form of money and is built on a decentralized system called the blockchain. That means that no single individual or small group of people has control over the coin. Instead, a vast audience (typically, miners who work on blockchain) has a fair say and role to play in the direction the currency happens to go. They are scattered all around the globe, making it a distributed system.

The first cryptocurrency was designed by the pseudonym, Satoshi Nakamoto, in 2008 and 2009. He released Bitcoin to the world, intending to create an electronic payment system based on trust and transparency. He built it on a digital ledger called blockchain, a system that still seems to puzzle the majority of the world today.

Blockchain Explained

Blockchain is known as a distributed ledger. Yet, those words in themselves cannot fully describe everything that blockchain does. Blockchain is complicated because of the amount of information it holds and the tasks it performs. Once you know how everything works and put the pieces together, you will have a complete understanding of blockchain. So, there is absolutely no reason for you to be afraid of it.

First, what exactly is a ledger? If you have done accounting and basic finance, you will know that it is a form of record for any financial transactions. No business would run adequately without a formal structure of records.

So now, understanding that blockchain is a digital record, you need to understand its goal to understand everything else. Blockchain was designed to create a trust system, not between the buyer or seller, but with a system that cannot be cheated.

Imagine there is a house that someone owns. To determine the house's actual value, there is a book of records (you can call this a ledger). The owner of the house writes down all the transactions that occurred. For example:

●  renovated the porch 2009

●  exterminated roach infestation 2010

●  fixed chimney 2011

●  gas leak repair 2012

Imagine these are all transactions that have occurred within the house. However, when you receive the book, these are the records you find:

●  renovated the porch 2009

●  replaced the locks 2010

●  fixed chimney 2011

●  gas leak repair 2013

If you take a careful look, you will notice three inconsistencies. Not only has information been removed, but information has been added! Naturally, this means you cannot trust the owner to keep accurate records (or the locks of the house). This is where a middleman typically gets involved. It is usually a financial institution or a real estate agency.

However, the middle man is susceptible to bribes, error, or making mistakes. It means that despite having an intermediary, the records are still not 100% reliable.

This is where blockchain steps in.

Imagine the owner making a transaction on the house using the blockchain system. The first transaction will be stored in a block of information. If it is the first block on the blockchain, it would be called a Genesis block. This information is securely encrypted and is given a key. This key is unique, however. Any information that is changed within the block completely changes the design of the key as well.

Up comes the next transaction, forming the second block of information. However, a copy of the first key is also stored inside the second block before the second block's key is made. This means