Hey venture capital investors, are you looking to get rich quick on mobile apps? Are you thinking about backing the latest mobile app that teaches you a foreign language while you cook the corresponding cuisine? How about a mobile app that makes mobile apps? Want to throw $1 million behind an app that lets you know where Cool Ranch Doritos wrappers are at all times, even if the wrappers are in trash cans?!
If you’ve got an itching impulse to invest that cool million right away…don’t. Instead, take a minute and buy a cash management bill.
A cash management bill is a short-term security that matures between several days and three months. They're sold by the U.S. Treasury Department to cover short-term cash needs and reserve funding while the government waits for tax revenue to come in.
They’re sold in $1 million increments.
That’s huge for you, fearless VC investor. Because if you own one of these, you’ll have just enough time to rethink the terrible investment that would have been an app designed to tell color blind people what color signs are on the road…but you have to look at your phone to read the color while operating the car. See? There are some bad ideas out there.
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Finance: What is a Money Market Fund?80 Views
finance a la shmoop. what is a money market fund? isn't it a strange concept
to think about going to a market to buy money? [man walks through grocery store]
well yeah it's strange but the practice exists and it's a huge multi trillion
dollar market today. the key word here is money and not investment. why such a big
diff? well because the notion of investing implies duration. that is when
you invest in a nice fixer-upper home or a tractor distribution company or shares
in a fat dividend-paying bank you're investing for presumably a long time [people stand in line]
like years maybe decades maybe centuries if you can find the right miracle pill.
but here we're talking about money like the stuff you can buy candy with. so it's
short term not long and a money market fund basically comprises many series of
pretty safe bonds that are all coming due in the next 30 to 90 days. sometimes [pie chart]
longer than that sometimes shorter but generally in the very near future. so why
would you care about a money market fund? well because it pays you slightly more
interest on your money than say a bank checking account. and lots of people in
corporations need cash just sitting around to pay their bills, so there are
tons of money market funds out there available and that's the gist of a money
market fund. we're sure you'll have plenty of experience with them by the
time you hit your sixth hundredth birthday day [people cheer and hold birthday cake]
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