What is money? Some might say something necessary in life. Some may say something that you use to get things you need. But you also need food in life and people used sea shells in the past to get what they need. What is the difference between them and what actually is money?
If we think about money, money is just a piece of paper. If you found a piece of paper on the ground, would you bother to pick it up? I bet that most people would walk by without even thinking about it. But most people will pick up the $20 bill on the floor. Why is it that although both are just pieces of paper, but have a different perceived value? In Naked Money by Charles Wheelan, he really goes in-depth and really makes interesting points about money and currency.
So what is the difference? The reason money is wanted by many people is because it is a medium of exchange. What can you do with money? Aforementioned, you can buy things that you need. Although money itself isn’t anything more than paper, it is wanted by everyone else because everyone else wants it. What do I mean by that? Because everyone wants money, it can be used to purchase goods from a vendor. The vendor then uses the money earned to buy his supplies for his store. Although money doesn’t carry tangible values, it is the exchange of currency and is used by people to buy things that they need. You can't walk into Walmart and buy goods with a white sheet of paper, but you can with money. There also isn’t $5 trillion being printed everyday. What do I mean? If $5 trillion was being printed everyday, there would be a major inflation and every dollar wouldn’t carry much value due to the abundance of money. Therefore, money is valuable because it is rare and in-demand.
There are so many different kinds of currency in 2016 from Japanese Yen, US Dollar, Korean Won, and the list continues on and on. We all know that one currency can be converted to another to purchase goods in another country. But how exactly are the currency rates determined? Currency rates have a lot of meaning and is something people need to be aware of. Some think that small currency rate change has little to no effect on their life. They couldn’t be more wrong.
The Black Wednesday in Britain was when the British Pound almost broke and almost crashed the economy. Why? Because one smart investor named George Soros basically made 1 billion dollars in one day. You heard that right: 1 billion dollars in one day. How did this happen? Because he was able to find a difference in currency and put his money in the inconsistency. Now you probably know how big of an impact the rate of exchange can have on the country and global economy.
So how is the currency working? Weak currency is good for exports and bad for imports. Likewise, strong currency is good for imports and bad for exports. Currency plays a big role in trade. Why? If a currency of a country is strong, it costs less for a company to buy their supplies and lower costs mean lower prices for consumers or bigger profits for shareholders.
Almost everyone wants more money, but not many people actually understand what money is. This book was a fascinating book and I would recommend everyone to try reading this book because it taught me a lot about money and economy and I feel that everyone will learn something that will give them a creative angle.
If we think about money, money is just a piece of paper. If you found a piece of paper on the ground, would you bother to pick it up? I bet that most people would walk by without even thinking about it. But most people will pick up the $20 bill on the floor. Why is it that although both are just pieces of paper, but have a different perceived value? In Naked Money by Charles Wheelan, he really goes in-depth and really makes interesting points about money and currency.
So what is the difference? The reason money is wanted by many people is because it is a medium of exchange. What can you do with money? Aforementioned, you can buy things that you need. Although money itself isn’t anything more than paper, it is wanted by everyone else because everyone else wants it. What do I mean by that? Because everyone wants money, it can be used to purchase goods from a vendor. The vendor then uses the money earned to buy his supplies for his store. Although money doesn’t carry tangible values, it is the exchange of currency and is used by people to buy things that they need. You can't walk into Walmart and buy goods with a white sheet of paper, but you can with money. There also isn’t $5 trillion being printed everyday. What do I mean? If $5 trillion was being printed everyday, there would be a major inflation and every dollar wouldn’t carry much value due to the abundance of money. Therefore, money is valuable because it is rare and in-demand.
There are so many different kinds of currency in 2016 from Japanese Yen, US Dollar, Korean Won, and the list continues on and on. We all know that one currency can be converted to another to purchase goods in another country. But how exactly are the currency rates determined? Currency rates have a lot of meaning and is something people need to be aware of. Some think that small currency rate change has little to no effect on their life. They couldn’t be more wrong.
The Black Wednesday in Britain was when the British Pound almost broke and almost crashed the economy. Why? Because one smart investor named George Soros basically made 1 billion dollars in one day. You heard that right: 1 billion dollars in one day. How did this happen? Because he was able to find a difference in currency and put his money in the inconsistency. Now you probably know how big of an impact the rate of exchange can have on the country and global economy.
So how is the currency working? Weak currency is good for exports and bad for imports. Likewise, strong currency is good for imports and bad for exports. Currency plays a big role in trade. Why? If a currency of a country is strong, it costs less for a company to buy their supplies and lower costs mean lower prices for consumers or bigger profits for shareholders.
Almost everyone wants more money, but not many people actually understand what money is. This book was a fascinating book and I would recommend everyone to try reading this book because it taught me a lot about money and economy and I feel that everyone will learn something that will give them a creative angle.