Short answers to the questions that come up most. No jargon. Open “More context” for the extra layer, or read the full lesson.
01
What it means when the peso weakens
It means each dollar costs more pesos. Anything imported — gas, phones, streaming — gets pricier, and traveling abroad costs more. If you earn in dollars it's the opposite: your money stretches further at home.
Mexico has a floating rate, so no office decides it each morning — it comes out of millions of buy and sell orders. Interest rates, fear, trade and remittances explain most of the movement. There's no "good" level: it depends entirely on which side of the transaction you're on.
Simple interest only ever pays you on the money you put in. Compound interest pays you on your money and on the interest it already earned. Same deposit, same rate — compound just keeps building on a bigger base.
Ten thousand pesos at 10% ends at 30,000 simple, or about 67,000 compounded, after twenty years. It rewards starting early far more than starting big. And it runs identically against you on a credit card, which is why expensive debt comes first.
It tracks 500 of the largest US companies, so it moves with what people expect those companies to earn. Better expected profits push it up; higher rates, bad news, or plain fear push it down. Day to day is noise — the trend is what matters.
It's weighted by size, so a few giant tech names can move the whole index alone. That's also why good news sometimes sinks it: a strong economy means rates stay high for longer, and high rates weigh on prices.
Split what actually lands in your account: 50% needs (rent, food, transport), 30% wants, 20% saving or paying down debt. It won't fit everyone perfectly, and that's fine — it's a starting point, not a law.
Use your real take-home pay, not your gross salary, and leave the aguinaldo out of the monthly plan. If you rent in a big city your needs will blow past 50% — that means your fixed costs are high, not that the rule failed.
Inflation means the same money buys less than it did before. Your salary can stay identical on paper and still shrink in practice. That's why money sitting still loses value, and why central banks raise rates to cool it down.
A 4% raise against 5% inflation is a raise on paper and a pay cut in practice — nominal is the number, real is what it buys. The same applies to savings: 3% while prices rise 5% loses about 2% a year, quietly.
Investing money you'll need next month. Chasing whatever went up the most last week. And checking your account every single day, which turns normal swings into panic. Slow and boring usually wins.
All three come from the same root: investing before the base underneath was ready. Cushion first, then expensive debt, then the emergency fund, and only then money you genuinely won't touch for five years.