One of my favorite subjects at school was economics.

Understanding how the economy works is the foundation of creating your own financial success because we operate in a subset of the world, regional, national and local economies.

ECOMONY:

The process or system by which goods and services are produced, sold and bought in a country or region.

This video by Ray Dalio, Founder of Bridgewater Associates, shows the basic driving forces behind the economy and explains why economic cycles occur by breaking down concepts such as credit, interest rates, leveraging and deleveraging.

I very much appreciate the superb graphics and the dialog explaining how an economy is a machine made up of simple transactions that are repeated over and over.

I know what you may be thinking… it’s a complicated subject! You are right it is… I recommend you watch this video with friends and family, pause often and discuss what it means to you. In this way you will have more fun watching, the subject will be less daunting and you will remember more of it!

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