Human beings make a living by exchanging. Everybody is a trader in one way or other. Some people trade time for a paycheck. Some people trade risk for profits. Some trade happiness for security. Some trade principles for politics while others trade ethics for cash. Basically, these exchanges are vital for our survival.
In early ages, we had started exchanging through barter system. Later, arrived gold, silver and even grains. The difficulty in portability of heavy, precious metals and grains led to their demise as currency.
After the development of free markets and establishment of independent countries, came a printed piece of promissory note by the central bank of a country.
Today, we call it money. Money determines the value and price of all our goods and services.
If I need a haircut and has a pencil to exchange with barber for his service, the barber wouldn’t entertain the transaction because he may not be in need for a pencil.
In a free market economy, you can pay money to the barber for his haircut service. So, he can buy any product or service of his choice using the money I paid him. So, money made the haircut service rewarding for both of us.
Lack of financial education in our society has made us believe that money is the root of all evil. From childhood, we have inculcated an image for businessmen as greedy and crooked people.
Businesses are, in fact, the backbone of our economy. As a free market economy, everybody have the freedom to operate a business and thrive.
I bought the pen that I use now to write this blog post from a shop at my hometown with a ‘Made in China’ label on it. Though, the pen is made in china, the ink and the nib can be made in any other country or by persons whom I don’t know personally.
How come a pen which has no personal or professional association with me ended up in my hand? The company or the persons behind this pen is making and selling pens to make money or profit out of this business. And, not to directly help me to write this blog post. Their business thrive only when they can produce and sell best pens at affordable price.
Last week, while I was traveling in bus from my village, I met with a person who works as a home-nurse. He takes care of an old man who is living near to my house. The surprising fact is that the home-nurse himself is an old man who hails from a distant place away from my hometown.
Why do a person in his sunset years, come to a distant place and take care of an old, sick person whom he don’t even know personally? I asked him the same. He told that he needs money to take care of his family.
This is how money works. Money is the reward for all our efforts. A reward that is easily portable and transferable.
Last day, I was watching an interview of a popular Malayalam movie actor on TV. He told that he started concentrating on movies in other south Indian languages. When the interviewer asked him the reason, he retorted that it is because in other languages, his remuneration is better than in Malayalam movie industry. Sometimes, for some persons, reward comes before the passion for their job.
I love speculating in stock market. Why do I love financial market speculation that is regarded as one of the riskiest business by many? Because, successful trading ideas in financial markets provide me with money or profit. My passion for financial markets, speculation, trading and my business in general has an eye on the reward potential of the business. We, traders calculate this potential before entering a trade. We call it, Risk to Reward Ratio.
Cash credit runs businesses. Businesses creates opportunities for jobs and innovations. Innovations in turn create business opportunities as well. This is how economy works.
This magical piece of paper for which we are working for also possess the ability to work for us. If you ask a successful business owner or an entrepreneur, he can tell you how he or she makes the money work for them.
Yesterday I read an interview of Jeff Bezos, founder of Amazon, in a local newspaper. When the idea of potential growth of internet struck his head, Jeff was holding a high profile job in American hedge fund industry. He quit his high paying job, rented a house and started an online book store.
During the initial stages of business, the books were delivered by himself to various locations.
Why did he do that? He should have continued with his job, without taking a big risk of starting his own business, isn’t?
But, Jeff thought that if his idea would have worked out, it would have made him millions.
On the way of becoming the wealthiest person in the world, he has created thousands of jobs and made online shopping a new trend. Online shopping made goods cheaper by eliminating middlemen and warehousing cost. By his Kindle e-reader device, he also made books cheaper in today’s Information Age.
Money makes the world go around. Money is the blood stream of a free market economy. Money can create great ideas to transform even the course of human history.
In an economic perspective, the evil is not the money, but the absence of money. Transparent businesses those create jobs under a government regulated environment is the need of the hour.
In our world, not every man-made systems are perfect whether it is free market economy, capitalism or democracy. Everything comes with flaws and imperfections. Money can also create wars or can motivate corruption. It is also capable to impair human relationships. As humans, we should embrace imperfections and flaws and move on with it.