The topic about money is actual since ancient times. Kings of ancient states were concerned about the question of increasing of royal treasury. Usage of money is common thing in our life. We buy food and clothes, pay for the services and do other payment operations. We hear word “capital” most of times today. What does it mean? In this capital essay, we will examine the definition of word “capital”, correlation between the definitions of capital and money. In addition, we will review the tips about saving and increasing of own capital.
Appearance of paper money
Let us start with the history of genesis of money. There was a barter before money at first. Barter is a direct non-monetary exchange of goods. Then gold and silver coins began to be circulated as money, due to the convenience of store and share. First banks appeared in Middle Ages, which were intermediaries between investors in one hand and those, who wanted to borrow money from the other side. Bankers took from investors real coins at a certain rate and lend them at higher rate, getting profit from this. The investor received a certificate of deposit, which proved that the real money were on contributions, and the bearer of this paper received a certain amount of money. Over time, these certificates had the same effect as the effect of real money. It should be noted, that these certificates were a requirement on banker’s assets, and all certificates were provided with real money in full size. People, who borrowed money in the bank, wrote a receipt, that they obligated to repay a debt with the rates. In the exchange of this receipt, they made a choice to get real money or certificate. Many people preferred to take a paper certificate instead of real money. Real money did not have any benefits for the bankers. Probably, it took not so much time, before the bankers made a discovery, that they can make loans, using “extra” money and thus increasing their profits. The number of certificates began to exceed the real amount of money. The real mystery of bankers could be revealed only in that case, when certificate holders at the same required exchanging certificates for real money. Therefore, there would be not enough of real money for all. You can ask a few questions about the ethics or legality of such method, but it will be difficult to answer these questions. Bankers seemed to think, that these “extra” certificates were as a requirement for their assets and they had the right to decide about the amount of such certificates. Therefore, this is the way, how first paper money appeared. That was because of using of the paper certificates on the practice. The word “bank note” comes from the English word “bank note”, which means “bank note”. Can you help me to rewrite my paper? This question is frequent among the students. Our service can help you. You can find more detailed information here.
Correlation between capital and money
We very often use such name as “capital” to the definition of money in common life. If we approach the issue from the scientific and economic point of view, the concept “money as money” fundamentally differ from the concept of “money as capital”. The funds, that we use every day, is just a payment tool and are not related to the capital. What can we say about the definition of “capital”? The word “capital” in its widest meaning has definition, as it is all that is able to generate income or resources, which are created by people in order to produce goods and services. In a more narrow sense – it is a working source of income, which is also invested in business in the form of means of production. The German philosopher and author of the world famous “Capital” Karl Marx said that the money became as capital only when they began to work on their owner. Money become as a capital due to the process of accumulation, storage and sales on the money market. Therefore, the owner of financial resources can earn extra income in the form of loan rate thanks to them. For example, if you put money into the bank, they become as capital and you become as an investor. However, participating in the service of business consumption, money become as money and capital, because they contribute to the sale of the goods and getting of income. Money become as a resource of capital, when they are used in the field of investment. That is why, how the concepts, such as “money as money” and “money as capital” appeared. Capital is a value, which brings additional value. Money by itself is also a commodity, but this commodity is specific. It is opposed to all the other products and plays a special role in the society. In fact, money is the only product that acts as the equivalent of the cost of all other goods. There is a constant exchange of labor products between the manufacturers of these products due to money. This particular product is a successful participant of commodity exchange – you can exchange money on grain, milk, plane and ship, weapons and gold, and the difference will be only in quantity. There are several other principles, which regulate the quantity of money in circulation. Looking at the example of gold, it is easy to understand that as more precious the product, as it will be more expensive, including such product as money.
How to Save and Increase own Capital?
Many citizens of our country think that investment of money is common thing among wealthy people, which have decent capital. In fact, there are many ways, which allow you to get a decent passive income from any investments. You obviously do not want to come to poverty. You can find more information about this occurrence in what is poverty essay. Let us look at them in this essay. The easiest option in increasing of capital is to open a deposit account in a bank. This method of investing is the most popular because of its accessibility. A deposit in the bank is the best option for your capital in 2016 because of current situation of inflation. Another most reliable and affordable way is the investment of money in precious metals. Some banks offer to invest in impersonal metal accounts. In this case, you can not only save money, but also win on increasing the value of precious metals. The price of gold usually begins to grow during the crisis, but when the situation stabilizes, there is a reverse process. Gold is a great option for long-term investments, because the risk of sudden depreciation of asset is minimal. Another very effective and convenient option in order to increase own small capital is mutual funds. This investment tool works such way – the investor buys a nominal security (share), price of which with a reasonable cash management can increase significantly. Investment in mutual funds is considered as a long-term investment. Its profitability is mainly dependent on the economic situation of the country. Choosing where to invest your capital in order to make them work, you have to pay special attention to mutual funds, because they are controlled by the state. Many of our compatriots prefer to keep their capital in foreign currency. Foreign currency over time is likely to rise in value against the grivna, but sometimes its rate falls, so be careful and cautious. Most importantly, that this has not happened at the moment, when you need delayed amount. In addition, at times, one currency may depreciate against the other. When it is about where to invest money in order to receive monthly income, we should discuss investment in other people’s business projects. Many citizens, who have little savings, abandon this method of investment funds, as fear that the project will fail, and they will remain with nothing. The stock market is not stable, so you should be very careful. The issuing company may go bankrupt, and then you lose all your money. However, the stocks may bring a good profit under favorable conditions. This is one of the most effective ways to raise capital quickly, which is successfully used by many savvy investors. Another method is own business. This is the most difficult, but at the same time the most engaging version of how to increase the capital. This investment instrument is accompanied by a high risk of loss of money, but if your business will be successful, the initial investments will increase significantly. If you have decided to invest own savings in the business, you should remember, that you will spend much time and effort on own business. In any case, you should try yourself in this area, as you will get invaluable experience that can be useful in the future. The last one method is stock trading. This is another one, quite popular in our time way to quickly increase own capital. You can invest a little money on stock speculations. You can take part in the auction, with having only 10-20 dollars. This option is perfect for people, who want to get the maximum income from small investments. However, such an investment instrument is accompanied by high risks. You can earn good money or even losing all own savings. In addition, in order to trade on stock you will need some knowledge. Before you do this thing, it is desirable to take special training courses.
Money is the well-known frequent form of capital in our life. It is important to know, that money become capital, when they make useful impact for owner. The great example of it is investment. There are many ways to save and increase own capital. If you follow tips in this essay, you will achieve better results with own capital.