Yan1
Active member
One reason so many people profess not to care about money is that the love of money has been described as “the root of all evil.”
It’s true, materialistic people can let an obsession with money drive them to do bad things for their own financial gain. But in reality, money is nothing more than a medium of exchange.
Money makes it easier to trade your labor for a diverse set of goods and services. The following are some things to consider when it comes to the value of money and why money is important.
Without money, if you wanted food, you’d need to find someone who had food who was willing to trade it in exchange for a service you could directly provide, or for a product you could produce. Bartering transactions like this are cumbersome and inefficient, not to mention a less reliable means of getting the things you need.
Thanks to money, you don’t have to hope someone wants to give you something you need in exchange for something you have available to trade. Everyone recognizes that money has value, so you can trade it for whatever goods or services you desire. This increases market liquidity, which refers to how easily assets can be purchased or sold.
Of course, this works only in situations where money actually has a stable value — and it derives this value from the fact that it is a scarce commodity. If everyone could obtain as much money as they wanted by printing it, it would no longer have any value.
To guard the true value of money, a central authority needs to make sure the supply of money remains limited. In many cases, some countries controls the money supply and makes sure the don’t end up with so much money that it is no longer seen as valuable — a process called inflation.
It’s true, materialistic people can let an obsession with money drive them to do bad things for their own financial gain. But in reality, money is nothing more than a medium of exchange.
Money makes it easier to trade your labor for a diverse set of goods and services. The following are some things to consider when it comes to the value of money and why money is important.
Without money, if you wanted food, you’d need to find someone who had food who was willing to trade it in exchange for a service you could directly provide, or for a product you could produce. Bartering transactions like this are cumbersome and inefficient, not to mention a less reliable means of getting the things you need.
Thanks to money, you don’t have to hope someone wants to give you something you need in exchange for something you have available to trade. Everyone recognizes that money has value, so you can trade it for whatever goods or services you desire. This increases market liquidity, which refers to how easily assets can be purchased or sold.
Of course, this works only in situations where money actually has a stable value — and it derives this value from the fact that it is a scarce commodity. If everyone could obtain as much money as they wanted by printing it, it would no longer have any value.
To guard the true value of money, a central authority needs to make sure the supply of money remains limited. In many cases, some countries controls the money supply and makes sure the don’t end up with so much money that it is no longer seen as valuable — a process called inflation.
