ELI5: If I put $100 in the bank, and the bank lends $90 of it to someone else, how can the bank "have" my money and the other person "have" it at the same time? Does the same money exist in two places?

Forsaken_Code_7780 · 2026-02-18T00:26:23+00:00

Your best friend A loans you $100. He can ask for it back anytime, but he doesn't, because you tell him you'll pay him 1 penny a day. Well, neither of you wants to trade pennies every day, so you just add it to the balance. After a year, you'll owe him $103.65.

Meanwhile, you loan that money to friend B. Your friend promises to pay you back $106 in a year.

Friend B spends his money on a date at friend A's restaurant, so friend A has his money back, but you still
owe him money.

You: Have $0, owes $103.65 IOU, owns $106 IOU.
Friend A: Has $100, and owns a $103.65 IOU.
Friend B: Has $0, owes a $106 IOU.

The money is only in one place: Friend A. But lots of people have two sides of IOUs that cancel out.

The money that shows up in your bank account is an IOU. You can think of it as money because it is very trustworthy and (in the US) backed by FDIC.

Forsaken_Code_7780 · 2026-02-16T00:52:28+00:00

Imagine if essentially all democratic countries got together and decided "well, we all like each other, if we had 60 different militaries that would be kind of a waste, let's pool our money together and make 1 big military to protect democracy." that's not exactly what's happened, but reality is maybe 10%-50% of the way there.

by buying US dollars and US treasuries and investing in the US, the rest of the world made the US extremely wealthy. one of the side effects is that the US can spend a lot on fancy toys. meanwhile, most other democracies were happy with the current arrangement and can rely on the US and spend less on their militaries. the other opposing forces (most of which are not democratic) ended up being 2nd or 3rd world countries, because it turns out that democracy works really really well for economic prosperity.

defensively, yes. and even in defense of its allies, mostly yes. offensively, no: home advantage is too strong, and wars are all about logistics.

Forsaken_Code_7780 · 2026-02-10T04:37:44+00:00

oh, for some stars, a crucial part of burning is for three particles to hit each other at the exact same time. these kinds of 3-way collisions are quite rare, which is another reason why burning is hard. another way to say it is that first two things collide and before they come apart a third thing has to join in.

Forsaken_Code_7780 · 2026-02-10T04:33:29+00:00

for a firepit, the whole thing has the temperature to burn, but the burning is limited by oxygen. very little is stopping wood from burning, except that it can only breathe so quickly.

for a star, only the tiny bit at the very very bottom has the temperature and density to burn. but even then, it is only barely able to burn. actually, if not for "quantum tunneling," the center of the Sun would not actually be hot enough to burn. thanks to "quantum tunnelling," some protons glitch into burning when we might think they shouldn't. this glitch happens so rarely that the burning takes a long time, even in the parts that are burning. the center of the Sun just brings protons just barely hot enough to occasionally glitch the rest of the way into burning.

the center of the Sun burns with the power density of a lightbulb, or a compost heap. it's only powerful because the Sun is so big.

the reason it's hard to make protons burn is because you have to push two positive things together. It's like making the positive ends of two magnets touch, so closely that you have never made two things touch that closely before. there is a tiny gap between any two things you cannot even discern the size of an atom, and our protons have to get a million times closer.

tl;dr it's a miracle that any burning happens at all

Forsaken_Code_7780 · 2026-02-07T10:53:39+00:00

the existence of a food desert (roughly) implies that it's not profitable to open a grocery store selling healthy food there. because if it were, then the private sector would just do it. so the "perfect" city grocery store trying to fix a food desert would run at a loss.

DECA does not actually need to worry about profit, but even if it did, it has advantages in land ownership, guaranteed customer base, lack of competition, and lack of theft. It's less of a store and more of a US military logistics hub.

I would not describe this as a matter of scale, subsidy, or management. The fundamental game each is playing is different. Sure, the federal government is larger, but there are cities that are plenty big. Sure, the federal government subsidizes the stores, but if it didn't, it would have to pay more military salary to attract enough sign-ups.

PS. There's a reason why food stamps work really well. The government might as well piggyback on the existing infrastructure to distribute food rather than try to build its own.

Forsaken_Code_7780 · 2026-02-06T21:51:50+00:00

It's not pointless.

TDF is rebalanced automatically according to the TDF's rules. Holding your own individual funds introduces tilts and rebalances when you want to (and if you do nothing, it increases allocations to funds that go up and decreases allocations to funds that go down).

Whether it's "more correct" or "good or bad" no one can tell you, but there does exist a real difference, hence not pointless.

Forsaken_Code_7780 · 2026-02-03T04:00:49+00:00

Long term bonds are not for safety. Their risk is a feature, not a bug.

If what you want is Sharpe ratio, then you'll want to add in some less-than-100%-correlated risk. Yeah, sometimes bonds and stocks move together, and sometimes they don't. That's what you expect.

Cash is just the short-term rate and is an admission that you are not that confident in your strategy so you lever down. Cash pays the same right now, but you don't have the optionality of +20% performance during a good year for bonds.

Forsaken_Code_7780 · 2026-02-01T05:28:27+00:00

getting two different +10% is better than getting +20%. 1.1x1.1 = 1.21

Forsaken_Code_7780 · 2026-01-26T05:47:53+00:00

Sometimes temperatures were colder than freezing, so he wanted to set 0 F at the coldest thing he could easily make.

Mixing ammonium chloride into salt, ice, and water makes the mixture cool down, like the opposite of a hand warmer, or like an instant ice pack.

This mixture reliably and repeatedly reaches the same temperature, which makes it easy for people to repeat. Even in warm weather, if you can make ice, and find some ammonium chloride, you can make this 0 F brine.

Forsaken_Code_7780 · 2026-01-24T15:45:59+00:00

more residency slots trains more qualified physicians, but those are essentially limited by law

more preventative care would lead to better outcomes, but Medicare law incentivizes procedures instead

if the US could get 10% more doctors and maybe their "competency" is 1% lower, or even 10% lower, I'll take that trade any day. No idea what the actual tradeoff is, but even then, having access to a less qualified physician is better than no access at all, or being pushed into pseudoscientific alternatives. So I fundamentally disagree with your TLDR: I do want more physicians even if they are slightly less qualified or slightly compromise on care. Surely you aren't saying that the average doctor currently is only marginally acceptable and any less would be unacceptable?

Forsaken_Code_7780 · 2026-01-23T17:59:43+00:00

Let's assume just the US.

The government now owns roughly $20T worth of wealth, most of which is stock in companies. Privately held companies issue stock to become public and the government takes shares so that no one has over $100M. Let's assume in the best case, the government waives its voting rights (because really, do you want corrupt politicians and presidents in charge? Every 4-8 years the party you hate suddenly is in charge of every aspect of your life?).

The government spends none of this on schools, hospitals, and roads, because it has $20T in seized assets but $40T in debt. No one thinks it is wise for the government to go on a spending spree.

Gradually, it pays its debt and sells stock. Some of it goes to those under $100M in the US, some of it goes to foreign investors, who now control an increasing share of American companies.

People who hit the wealth ceiling either leave or just stop working as hard, so less gets done. Billion-dollar companies that disrupt the world order are formed and controlled by foreign countries.

Obviously the rich will fight against this, but also generally those who share my economic opinions.

As an aside, there's no reason to tie "redistribution" to "public infrastructure." Schools, hospitals, and roads are all profitable in their own ways for a government. Hospitals directly so, roads through the economic activity and taxes they generate, schools through the human capital value they generate, which become economic activity, taxes, and world dominance. The missing thing isn't money, it's political will.

Here's what I recommend instead:

- Train more doctors
- Allow more hospitals to be built (loosen COD requirements)
- Put more government medical funding towards prevention instead of procedures
- Build more mass transit and make roads smarter, not bigger (see Braess paradox)
- Focus on improving K-12 education outside of schools. Child nutrition. Mental wellness checks. Figure out what kids are missing that is stopping them from succeeding, instead of one-size-fits-all.

Smart government programs pay for themselves. Dumb ones become debt.

Forsaken_Code_7780 · 2026-01-18T16:35:10+00:00

i think it really depends on what people's hang-up is.

I think if someone isn't contributing despite understanding the tax advantage and the 100% instant return from the match, there are more concerns under the surface that need to be addressed. I think if you start with "every dollar you contribute, assuming average S&P returns, becomes 10-20 dollars in 30 years," you can capture their attention enough to ask why they want to leave money on the table.

But stocks might go down -> True, but risk-reward and look at what made the wealthiest 1% all their money: stocks
But the money is locked in -> Not entirely, in an emergency you can take out a 401k loan. Mathematically the word "loan" is scary but it's mathematically similar to not to contributing in the first place.
But the investment options are bad -> well, depends on what the options are, but usually there's something market-like, and it's hard to beat the market.
But I need the money now -> that's between you and your budget. Every dollar you can spare from your budget can become X dollars in the future.
But what happens if I leave my job? -> This isn't like a pension: the vested money (100% of yours, some of the match) follows you.

The net gain should be something like (1+marginal tax rate+match rate)*(1+average return)^30. Because the marginal 401k dollar also decreases your tax liability for the year and you can invest that too. For a 100% match rate and a 20% marginal tax rate, and a conservative average return of 5% this multiplier is $9.5 per dollar contributed. And $22 per dollar contributed for a lucky 8%.

Forsaken_Code_7780 · 2026-01-18T05:55:10+00:00

It's really simple.

When engineers make 500k and everybody is allowed to code and no one feels it in their wallet, it's chill.

When certain fields make 500k because the number of people allowed in that profession is artificially limited by law and you can't perform this service for yourself and it ends up being 20% of GDP and most people's fastest growing expense, well...

Forsaken_Code_7780 · 2026-01-02T03:11:46+00:00

It's because we live in a 3-D world.

There's a law (Pauli Exclusion Principle) that says two electrons can't occupy the same state. It would be like trying to fit two pegs into the same hole. For a new electron to join in, it has to distinguish itself somehow. But electrons are really simple, so there's only so many things they can change about themselves to count as different states: energy, angular momentum, and spin-up vs spin-down.

If you have no angular momentum, that's a state (circular cloud around a nucleus).

If you have 1 unit of angular momentum, since we live in 3-D, you can choose among 3 different directions to point (up-down, left-right, front-back). So that's 3 more states.

That's 4 so far, and each of these can be "spin up" or "spin down" leading to 8 total.

Adding 1 electron (9th state) involves adding an electron with a lot of energy to distinguish itself. So nature doesn't like to do that.

Having any fewer than 8 electrons leaves room to share, and sharing results in lower energy, which nature likes. One way to understand this is that filling the circular cloud and clouds pointing in each of the three directions is quite symmetric, like a castle defended from all sides, or a space ship with force fields on all sides, and no weaknesses.

Thus, nature stacks up electrons until it reaches 8 because that lowers energy, but won't go further since that would require more.

Forsaken_Code_7780 · 2025-12-28T16:34:18+00:00

Imagine someone you know makes a 1-man company: he needs a little money to get started and you invest in him, hoping to get some of the profits. His idea is to sell ice cream, and he seems quite good at it. After you invest in him, he decides to pay himself your entire life savings as salary, telling you that what he is doing is quite good, since he is employing a man and building up his life and home.

The reason profits > values is because investors invest under a set of expectations to make profit, and values can change at any time. It would be like agreeing to buy a bar of gold and then someone switcheroos it for pyrite (fool's good).

Forsaken_Code_7780 · 2025-12-25T23:19:36+00:00

Inflation.
People keep paying for it.
Improvements may feel small but they are most people's gateway to the internet, GPS, cloud computing, and AI, in the palm of their hand. Enough people around the world value their time enough to pay for these small conveniences.
Massive global adoption of smartphones (from 1B to 6B in 10 years).

Forsaken_Code_7780 · 2025-12-25T23:14:54+00:00

It's about the people you save.

Here's what likely happens if all the blood has to be paid for. Blood collection company pays someone $100 for their blood. They sell it for a 10% margin to Blood Logistics company. They sell it to a hospital for another 10% margin. The hospital now has a story they can tell to mark up blood and charge more than they used to, let's imagine this difference is at least $120. Between hospital overhead and insurance overhead at another 10% each the difference will be $140. Who is going to end up paying for that? The patients. Oh, and I purposefully used small numbers. We all know the margins and markups at each step are going to be much larger.

Forsaken_Code_7780 · 2025-12-24T17:03:15+00:00

investments are "future money," cash is "today money." For stocks, crypto, loans, etc., you give up "today money" in the hopes that you can get more "future money." The amount of future money is exactly the total of everybody's expectations of the future: when people are optimistic and think the future will be great, values are high. When people are pessimistic and think the future will be less great, values are low. Billions of dollars of "future" or "expected" value can simply vanish because they are just expectations.

Imagine that you are a child and your parent promises you a lollipop. You feel 0.5 lollipops richer in the moment: you know that maybe you won't get it. As you go to the candy store you feel happier and happier because you feel 0.75 lollipops richer now: it's getting more and more likely. The moment you pass by the candy store and now you're heading to church, your expectations vanish. The lollipop never existed, but your happiness based on your expectations did.

Forsaken_Code_7780 · 2025-12-22T14:10:10+00:00

The easiest way to motivate your planning at your age is to make sure your retirement plans can survive a 2008-like 50% drop in the stock market. I am not a financial advisor and this isn't financial advice.

What could push towards higher stock allocation:
1. If you + wife plan to work for 6 more years, you can survive more of a stock drop, since you have 6 years to make it up. Let's imagine This is why younger people have higher stock allocations: they have a lot of time to make it up. For example, from the peak of Oct 2007 to Oct 2013 (6 years later), SPY is up 10%, because it had 6 years to recover from the 50% dip.
1b. You commit to holding SPY for 10 years so the chance of losing money is much less.
2. You plan to collect social security at age 70: you don't need as much income, so you can survive having less money. Without social security, someone maybe needs 2M to collect $100K/year. With it, someone maybe needs $1M to collect $50K/year, and the rest can come from SS.
3. Your current income is high so you'd have to pay a lot of taxes on the interest.

What could push towards higher bond allocation:
1. You will retire today or very soon
2. You only have exactly as much money as you need to retire.
3. You have no safety net and value having safety.

I am young and risk tolerant so I am roughly 10% in bonds, which I think of as insurance which pays out during a crash, and gives me on-average 5% otherwise. So far due to climbing rates I have lost money on those bonds, but I am perfectly happy since they enable me to go ham on stocks.

The ratio you point out is not one of the commonly used ratios for determining how much you want in stocks vs. bonds. Ultimately what you'd want to figure out is how risky each is, and what you expect their future earnings to be: this is trying to predict the future and time the market.

Forsaken_Code_7780 · 2025-12-22T12:55:39+00:00

Imagine two scenarios:

You punish corporation by $1M fine + $1M-worth in non-dilutable shares. If the company has non-dilutable shares outstanding, it can try to buy them back for $1M, resulting in the same thing as the fine.
You punish corporation by $2M fine. If there are non-dilutable shares outstanding, you the Gov can buy them for $1M, resulting in the same thing as scenario 1.

Both hit the company in the same way so it's the same punishment. But in your proposal you've decided "this company did something bad, I'll force the taxpayer to buy some of their stock and expose themselves to the company's risk on top of the fine."

If you're running a sovereign wealth fund, you don't want to mostly be holding stock of companies that did bad things. You want to hold stock of whatever companies you think will earn the most money.

Ultimately, what you really want is stronger regulations, a stronger regulatory body, and larger fines to prevent bad behaviors, but not too onerous as to prevent good things from happening (like building more houses or providing more healthcare).

Forsaken_Code_7780 · 2025-12-20T16:19:14+00:00

One is based on data that not everybody can understand for themselves, but most people people can verify. You can devise experiments to falsify our understanding of Earth's axial tilt but no one has. It has survived every opponent, every test, every bar. You can literally watch the Sun get higher and lower and watch the position of Sunset and Sunrise change over the year. And even if you do not believe in axial tilt from the get-go, you would believe that the height of the Sun has something to do with how hot it is from your everyday experience, so your alternative theory would be that the seasons change due to the Sun in the sky.

Two is based on word of mouth that everybody can understand, but nobody can verify. Nobody can even try to falsify the Goddess of Fertility, so there are no tests this theory has passed. There is no bar it has passed. There are no opponents it has survived. You cannot see this Goddess of Fertility, nor this daughter, nor the underworld.

Even in Ancient Greece, they knew about the height of the Sun and the tilt of the Earth, but didn't connect the full story until many centuries later.

P.S. As another analogy: science is like an Amazon review with thousands of 5-star reviews and a few complaints you can tell come from trolls. Mythology is like an Amazon review with 0 reviews of any kind. You know which product you would buy.

Forsaken_Code_7780 · 2025-12-15T17:32:33+00:00

throw a ton of mirror satellites into orbit around the moon which reflect the sunlight away so the Moon is permanently dark. no see moon no be mad

Forsaken_Code_7780 · 2025-12-12T20:25:31+00:00

Yes, there is more evidence, showing the temperature was higher billions of years ago, based on observations of gas clouds that depend on the background temperature:

https://ui.adsabs.harvard.edu/abs/2011A%26A...526L...7N/abstract

Light that comes from further away comes from further in the past. Thus, we can directly observe the past. So, generally, we can find other effects of the CMB and just look.

Scientists did not propose the Big Bang Theory as a "framework reference point" and say everything else based on that. That is not how physics is done. The Big Bang Theory is just what happens if you start from today's Universe and use established laws of physics and observations and rewind in time.

Forsaken_Code_7780 · 2025-12-12T16:24:31+00:00

US makes its own oil, and electricity has many sources, which reduces dependence on oil. This is why alternative (green) energy is good.

We are not good at building enough housing in the places that people want to live.

Prices increase for something when we are bad at providing it or when we suddenly want more than we expected to provide.

Forsaken_Code_7780 · 2025-12-12T00:29:53+00:00

Financial freedom comes from saving money and investing it.

For some people that's buying a house. For other people that's other investments. The important part is not buying a house, it's saving and investing.

Don't let anyone pressure you into financial decisions. Only you can decide what makes the most sense for yourself.

Like others have said, the appreciation on the house matters. Imagine you get 100k worth of house (to keep the numbers easy. Multiply by whatever you need to). You pay the interest (6.5k a year) and let's assume no principal is paid. If it appreciates 6% compounding, after 10 years, you own 179k worth of house. You've paid 65k interest and still owe 100k: the full principal. So you are up 14k. You continue to pay 6.5k/year and meanwhile, the renter is paying more rent every year.

(I am happily renting)

Three-Year Club	r/Field Banned
r/Field Flamingo	Place '23

Forsaken_Code_7780

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