Do you know what are the biggest companies on earth? Well, Forbes.com once again made a huge list of the The Global 2000 from 60 countries. The composite ranking is simply based on sales, profits, assets and market value. This is important because one metric alone can give a false impression about corporate size.
In total, the global 2000 companies now account for $30 trillion in revenues, $2.4 trillion in profits, $119 trillion in assets and $39 trillion in market value. Around the world, 72 million people work for these companies.
So, here are the top 10 companies in 2008 from The Global 2000 list by Forbes.com

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Many people say their house is the greatest asset they got and also their largest investment. In the most cases their car is the second greatest asset they got and they are really proud of it. But are these thing really assets? Unfortunately I have to say the in most cases they aren´t they are liabilities and the reason for that fact is that they absorb your money like a sponge. For example a car has many extra costs gas, taxes, repairs and so on, also a house needs very much money for energy, repairs to say nothing of the price you have to pay to buy it. So when you want to become rich it´s very important to know the difference between an asset and a liability.

Asset = Money into your pocket

An asset puts money into your pocket, an asset should generate income on a regular basis. The traditional definition of an asset is anything that you own is worth something-that could be “turned into money” if you needed it to be. Look around your room. Is there anything that might be worth something? You probably have more than you think… a computer, a TV, a cell phone? Skis? Your assets also technically include the balance in any bank accounts in your name, or the current value stocks bonds that you have your wallet.

But here´s the catch: While might consider everything of value in your room an “asset” (because you could sell it for decent money on eBay), it´s not really an asset until it is sold. Why? Because it´s not putting any money into your pocket until then. (And then, it´s not longer an asset because it not longer belongs to you!) Same thing goes for cash in your wallet, your cash is not secretly reproducing itself, putting more money into your pocket. But there are places other than your wallet where cash “reproduces itself”- when it´s invested in assets that give you a passive portfolio income. Anything you own that produced passive portfolio income is an asset.

Liabilities = Money out of your pocket

Liabilities are the opposite of assets. Liabilities take money out of your pocket. In fact, a lot of things mentioned above- the TV or computer in your room that that might traditionally be considered “assets”-are actually liabilities right now, because it took money out of your pocket just to get them. And many of them, when converted to cash, would give you back less money than you would pay for them. So just if the value of your house or your car grows more than you pay for it you can call it an asset.

Source: Rich Dad Poor Dad for Teens

Warren Buffett, the world richest man of the year 2008, a big philanthropist and probably the best investor of his days. These seven movies show us who he is, where he came from and how he made such an enormous amount of money.

Click to play the movies.

Part I

Part II

Part IIII

Part IV

Part V

Part VI

Part VII

As Joseph Schumpeter passionately argued in his 1942 book Capitalism, Socialism and Democracy, recessions are a necessary evil in capitalist societies. Well, there are some arguments, that back up this theory. Although the word recession strikes fear into the hearts of people, recessions heal the economy from unrealistic developments and creates opportunities for investors. In the long run it is just a periodic downturn in the economic cycle and for some good reasons it seams.

Effects on the economy

Recessions correct economic imbalances and helps the economy to get back to a healthy, realistic, and sustainable rate of growth. The “job” of a recession is to clean the “fat” out of the system, mop up excess, and pave the way for the next expansion. However, there are always bankrupts, but in a recession the weak companies get put out of business and the strong ones are forced to optimize their business models and come out with better products. This brings job losses which are freed up to be efficiently used somewhere else in a flexible market. Recessions also eliminate these sorts of unsustainable bubbles like the technology bubble in the late 90s or the actual housing crisis. Of course, it hurts to lose a good paid job and suffer from financial loss, but it is necessary for our economy to become healthy once again.

The Stock market drops

Stocks markets go down in recessions, but as stated in one of my previous articles, Search for opportunities in crises, there are great opportunities in stock market declines. During periods of mass panic on the market all stocks go down for a while, because people like to panic somehow, I don’t know why. The important thing is, both good and bad companies go down. This means, that you can get high quality companies at a low price and with good long-term perspectives. That’s the time to position yourself to profit from these companies and catch the opportunity while it is there.
In fact, I even know a few investment guys, who are really cheered up and looked forward to the upcoming recession because of new investment chances.

Personal finance

According to a report by CNN, I found on moneysocket.com, the average American owes $10,000 in credit card debt annually. If people will ever recognise this misbehaviour, it maybe will happen during a recession. Although, I don’t believe people are easy to change, I think if suffering from financial loss, unemployment and hard times, maybe they start to think about there personal finances and learn something from it.

As we know from the past, a recession lasts for about 10 months, so good times will be back. Nevertheless, they are necessary and you will experience a few recessions in your life, so better be prepared. The important thing is not to panic and learn from crises. In fact, recessions can make you better and more skilled after all, just like they do with our economy on a regular basis.

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Every year it´s time for the April Fool hoax and also in this year many companies, newspapers, websites, television programs and other organisations took delight in foxing their clients. Here are the 5 most crazy statements of big business concerns.

1. Google Inc.

In Australian Google advertised a search engine which gets results of events 24 hours before they happen. Also Google announced in a kind of joint venture with Virgin Blue to set up a permanent colony on the planet Mars. Larry Page, Sergej Brin and Richard Branson, the CEOs of the two companies, want to start their spaceship in 2014.

2. IKEA

The furniture store announced to build the first drive-through furniture store in Berlin. “Assortment, loading and snacks everything just for 10 Euro extra”.

3. Virgin Blue

The CEO of Virgin Blue Richard Branson advertised for tickets for half the price, the catch was that you had to stand the whole flight. That the “Chair free fares” had just been an April Fool´s joke was terminated by booking them online.

4. BMW

The German car-maker promoted a “dog-deflector” in Great-Britain. The system recognises when a dog wants to piss at your car - and distributes electric shocks.

5.Microsoft

Microsoft presented 3 new products which actually wouldn´t be such a bad thing. A helmet with a monitor on the visor, an original X-Box made of wood and a board game with live interaction. But in my opinion the best idea was a X-Box 360 Recon Edition.

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Investing in the stock market is a long-term thing, so you shouldn’t put money in, which you will need in the next 2-3 years.

This is a very basic investing rule, you always have to remember: Only invest money you don’t need. Before investing you have to check out your financial situation first to know how much you can afford to lose. Yes, I said lose, because that’s the point. To keep it simple, only invest what you could afford to lose without that loss having any effect on your daily life in the foreseeable future.

Short-term investing is risky

So how much would that be? It depends of course on your personal situation, but I will give you an examples. For instance, your child will go to college in 2 years, so it’s obvious that you have to save money. Don’t put it in stocks, not even in blue chips. Even blue chips can and some will almost for sure suffer periods of bad performance on the stock market. It’s to risky. You can’t afford to lose this money, because you will need it. Additionally, you can’t predict the stock market as a whole, so you will not be save from the next crash. That’s why you shouldn’t trade, for example, with the money you need for the rent. When you lose, you’ll have to sell at the end of the month again, because without the money you can’t pay your obligations. So, don’t be so foolish.

You should always be invested

To invest money you don’t need, doesn’t mean you should stay out of stocks at all. You can and should invest at any time, unless you are under heavy debt or suffer total misfortune. There are all kinds of complicated formulas for figuring out how much you should put in stocks, but keep it simple and invest what you don’t need. The question always is how much you can afford. First save money, then invest in the stock market. You can start with $100 a month. For example, save one tenth of your income no matter what happens and invest it wisely. When you have not much money, start small and grow big. Keep in mind, that your money will compound and the sooner you start to build a fortune, the sooner you will have what you desire.

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The stock market expert and speculator André Kostolany once said that it´s better to study psychology than economics if you want to make money on the wall street. To explain what Mr. Kosolany meant with this assertion I want to show you a little example.

Imagine we trow a coin nine times, the first time we do that we receive the array of numbers (N) and heads (H) of N-N-H-N-H-H-N-H-N . The second try returns the sequence N-N-N-N-N-N-N-N-N.

So the question is which array is more probable? And if we look at the sequences most people would say that the first one is more plausible, the answer however is that they are stochastic equal. But what has this to do with investing? Well this little example tells us much about how people think. We are trying to see pattern where no patterns are, there are many people who have the same way of thinking by picking their stocks they try to see patterns. This is called representativeness heuristic and is one of the basics of behavioral finance.

The psychologist Daniel Kahneman got the Nobel price in 2002 for proving that irrational behavior in investment decisions can be attributed to special parts of our brain. In his experiments he lay probates in a MRI and asked them different questions about money. For example he asked if you would prefer to have 100 Dollar now or 110 in 4 month? The results of the tests were impressing, always the probands decided for getting the money immediately especially the hind brain was activated. When the probands decided for getting more money later the cerebrum made this decision. In the end Mr. Kahneman could prove that a large part of of investment decisions was controlled by mechanisms which originate from a time of eating and being eaten. Fight, attack and escaping are behavioral patterns which influence us till today. So our brain is thinkable improper for investment decisions, we build on the same mechanisms which also reptiles use for their daily life. But if you realize that you can really benefit from the manners of the others.