How does the world - in aggregate - generate a non-zero return?
I think you'll find some sound answers here: Money Creation in the Modern Economy by the Bank of England Where does money come from?  In the modern economy, most money takes   the form of bank deposits. But how those bank deposits are created is   often misunderstood. The principal way in which they are created is   through commercial banks making loans: whenever a bank makes a loan,   it creates a deposit in the borrower’s bank account, thereby creating   new money.  This description of how money is created differs from the   story found in some economics textbooks. It appears that you have bought into the Communist lie.  Milton Friedman lats it all out so well. No transaction ever occurs unless both sides in the transaction benefit.  Let's say you are out for a walk. While walking you feel hungry. You find two quarters ($0.50) in your pocket. You enter the nearest convenience store and look for a snack cake to buy. You find a Twinky selling for 40 cents. You pay for the Twinky and leave the store while eating it. You also leave with a dime in your pocket.  To you the Twinky is worth 50 cents as you would have paid what you had to obtain one. So made 10 cents profit on the deal. The shopkeeper sold his merchandise for 40 cents but it only cost him 25 cents to obtain the Twinky. He made 15 cents profit on the deal.  You wanted the snack more than you wanted the money. The shopkeeper wanted the money more than the snack. You both got what you valued more. You both profited by the transaction.  That is why Capitalism works. Value (worth)  is in the eye of the beholder.  Remember: no transaction occurs unless both sides profit.  Edit: once again I ask: if you give me a negative vote please explain with a comment.
Generally just giving a Bank Account Number does not cause damage. It depends on what other information the user has and the country you are in.  Generally Bank take telephone instruction for certain [non-transactional] activities , and they would authenticate you by asking account number, address, date of birth and some additional info. In today's world this info can be pretty easily accessible, for example facebook or a details posted on Jobsites etc. It is best avoided to give the bank account details, unless you are sure of the person.  Typical other misuse is using your bank account to Launder black money. The typical modus is transfer funds to you and then ask you to transfer it elsewhere. At times its also a scam and you loose money as they trick you in sending money before you receive it. "It makes sense if the NPV is positive. But what rate should you use at determining the NPV? A textbook might say ""market rate"".... and by definition the market rate to use in bond calculations like yours will mean that your NPV will be zero.  How can this be? Well it's a bit of a circular definition. You take less capital to earn a higher return. The value of your capital spread over the period of the bond's maturity is the net difference... but the money in your pocket from selling the bond and not purchasing also has value. Banks and traders do this exact swap every day, many many times. The rate at which you can execute this swap is what defines the market rate. Therefore, by definition, the NPV will be zero. Now, this doesn't mean it's a bad idea for you. You can, on your own accord, decide the value you place on the capital versus the yield and make the decision. Do you expect rates to rise or fall? Do you expect higher or lower inflation? In reality you can form whatever opinion you like for your own circumstance, but the market is the net aggregation of formative opinion. You only get to decide whether or not you agree with the market." "The last 300 years of civilization have been amazingly atypical. We have experienced industrial revolution after industrial revolution.  Economic revolutions that would have changed the world in 1000 AD show up as noise.  Coal, Canal, Rail, Trade, Electricity, Refrigeration, Oil, Gas, Nuclear, Assembly Line, Vacuum Tube, Mass Education, Transistor, Integrated Circuit, Nano-tech, Antibiotics, Slaying of absolute Poverty, Democratic, Feminism, Superhighway, Automobile, Airplane, and on and on and on. A cascade of miracles and world-shaking events that have intertwined and together generated a many century long economic singularity that has upended the entire world and generated today's world. The question you should ask, is tomorrow going to be like today?  And the answer is yes; in weather, and in economics, the most likely bet bet is always ""things keep on going like they have in the short term"".  But next week?  Next month?  That is often not much like today. There is reason to believe that the yield on the above revolutions will continue to propel the economy forward, and that there are multiple promising new revolutions on the horizon. But barring that kind of world-shaking revolution, you are not going to maintain a 5% real return on investment over another centuries for the stock market.  The value of investments has to go up by a factor of over 100 in order for that to happen, and the US stock market is already close to 20 trillion dollars. For it to have a market cap of 2 quadrillion dollars the world economy will have to be much larger than it is today.  And to be that much larger, the world would have to be a much stranger place that values very different things. We are currently roughly a K-type 0.72 civilization.  A simple linear expansion of our power of 100x brings us up to K-type 0.92, which is going to cook the planet from waste heat (not from CO2, but just from the waste heat of the energy it uses!) Efficiency can mitigate this, but only to a degree.  100x more efficient technology is going to less believable than a beanstalk and space colonies. If you believe that the stock market is going to continue to grow at 5%/year for the next century, start investing in really out-there technologies.  Gene editing, virtual and augmented reality, space beanstalks and private lift, miraculously cheap energy storage, etc.  Because simply refining the technology of today won't get us there. Modern industrial civilization has been a miracle factory.  That is what pulled off that growth rate.  If the miracles stop coming, so does the growth. There is a road to it.  It would involve clean energy, mass personal automation and friendly (not smarter than human) AI, and the entire world lifted up to the standard of living of the top 3% of the USA on average.  But it is far from guaranteed." "Equation: (M x 12) + MOOP = Worst case scenario cost Where M equals the monthly cost and MOOP is the maximum out of pocket amount.  So, if a plan costs $500 a month and the maximum out of pocket amount is $12,000 - which in a worst case scenario you would pay (it's almost always over the deductible) ... ($500 x 12) + 12,000 = $18,000 Most people look at the deductible, but be aware this is incorrect in a worst case.  The last one (maximum out of pocket) really hurts most people because they overlook it: Deductible vs. out-of-pocket maximum The difference between your deductible and an out-of-pocket maximum is   subtle but important. The out-of-pocket maximum is typically higher   than your deductible to account for things like co-pays and   co-insurance. For example, if you hit your deductible of $2,500 but   continue to go for office visits with a $25 co-pay, you’ll still have   to pay that co-pay until you’ve spent your out-of-pocket maximum, at   which time your insurance would take over and cover everything. New in   2016: embedded out-of-pocket maximums One change in 2016 is that, even   with an aggregate deductible, one person cannot pay more than the   individual out-of-pocket maximum within a family plan, even if the   aggregate deductible is more than the individual out-of-pocket   maximum, which is $6,850 for 2016. For instance, even if the overall   aggregate deductible was $10,000, a single person in that family plan   could not incur more than $6,850 in out-of-pocket expenses. (In 2017,   the out-of-pocket maximum will increase to $7,150.) After they hit   that number, insurance covers everything for that person, even as the   rest of the family is still subject to the deductible. From your question: Thanks - not sure I totally follow you. My question is, essentially:   ""Say a typical large employer X gives you 'healthcare' as a benefit on   top of your salary. In fact, how much does that cost corporation X   each year?"" ie, meaning, in the US, about how much does that typically   cost a corporation X each year? That's a good question because they may qualify for tax advantages by offering to a number of employees and there may be other benefits if they encourage certain tests (like blood work and they waive the monthly fee).  More than likely, using the above equation may be the maximum that they'll pay each year per employee and it might be less depending on the tax qualifications.  You can read this answer of the question and it appears they are paying within the range of these premiums listed above this." "not trying to be insulting, but i would contend your response should be the one dissected in econ 101.  why? because yours is the theory du jour among business interests and economic commentators in the media. the fact is that this brand of ""free market"" capitalism rests on a series of impractical assumptions.  first is that investors are perfectly rationale allocators of capital.  from this, that excess capital is invested - at all, let alone in a productive fashion.  next, that taxation (presumably what is considered ""high"") has caused unproductive investing practices, when in fact the inverse is true - decreases in effective income tax rates (personal and corporate) combined with the reduction of passive taxes (like the estate tax) have resulted in the incentive for investors to sit on their capital and do nothing to return it to the system.   finally, and perhaps most egregiously, that investing profits back into expansion and worker compensation is misallocation of resources. the entire article serves to demonstrate that this line of thinking is a self defeating concept. giving precedence to the relatively elite investor class ensures that capital is allocated according to their whims, and often times that simply means into their bank accounts. this starves the system.  so i don't expect to change your mind, but i would like others to know that what you are saying is widely debunked, chicago school nonsense that gets a lot of air time from self serving interests across popular media.  a few hours of unbiased research will make this evident. it is somewhat ironic that the theory has limited standing academically, as it works only in an academic/theoretical setting." I'm not 100% familiar with the index they're using to measure hedge fund performance, but based on the name alone, comparing market returns to *market neutral* hedge fund returns seems a bit disingenuous.  That doesn't mean the article is wrong, and they have a point about the democratization of data, but still. I think the key to intrinsic value is that if you have something with *intrinsic* value, you can derive some direct benefit from it without trading.  For example a house has intrinsic value because without trading it, you can use it to stay warm and dry, and use it to store your stuff. Money - whether it's federal currency or bitcoin - has a very low intrinsic value. What can you do with cash without trading it? Maybe make some paper art or patch a leaking boat, but a $20 bill has very little practical (intrinsic) value until you trade it for goods or services. The same with bitcoin - you can't play it like a video game or drink it if you're thirsty, all you can do is trade it for things that you can use directly. No, there is nothing on the sidelines.       Currency is an investment. There is no such thing as uninvested wealth.       If you had a million in USD at the beginning of 2017, you would currently be out about sixty grand.        There is no neutral way to store wealth.