Tag Archives: Services

Money: Where it Comes From

Most people like money. They either collect it, or simply view it as a means to buy their next meal. The fact remains: money is useful. But why do we used money and where did it come from?

It is commonly thought that money arose as a result of the need to barter. This isn’t necessarily the case. There isn’t any society that we know of run completely on barter, even in ancient times. However people did barter a little, and the rest they either gifted or gave away as a form of debt.

At some point the use of debt was coupled with the use of commodity currency. Depending on the people group or the time period in which it was traded, money could be shells, wheat, precious metals, and eventually physical coins. It was after this first occurrence of coins around 600 B.C. by the Lydians that coins started to become more commonly used.

As time progressed, and more and more groups of people used coins, a representative form of money emerged. This was basically paper or some other useless thing, that was available to trade for something of value, like gold. These “certificates” became more and more widespread.

Other societies have since gone back and forth between representative money and actual commodity currencies. The U.S. started out with gold and silver coins as its money. At some point it started a gold certificate or what’s known as “the gold standard”. These could be traded in for a physical amount of gold. Then, with the actions of President Nixon, the gold standard was abolished and we have since been using what’s called fiat currency.

Fiat Currency is just paper, or electronic money, that can’t be turned in for any amount of gold or silver. The only way it has value is because the government says it does. The very nature of fiat currency, as with most currencies, is one of inflation. Since we have gone off the gold standard, prices have “gradually” gone up. What used to cost $1 now costs $10.

The beauty of our current system is that instead of bartering or becoming indebted every time we want something, we are able to trade currency for things of value. In giving someone a dollar, we are giving them something that is widely able to be “traded” for something else of value.

While our system of money in the U.S. certainly isn’t perfect, it has done a great job in facilitating the transfer of assets, resources and services from one side of the economy to the other.

Pursue a “Normal” Career or Become an Entrepreneur?

With the rise of social media marketing, the technological advancements with commerce, and the general business sentiment in the U.S. rising, many young people(as well as older people) are finding entrepreneurship as an increasingly appealing life choice. I would say as with most trends, there is both bad and good aspects.

On one hand entrepreneurship is what America is built on. From Ford Motor Co. to Apple Computers, companies that are able to provide what customers want will always succeed. However, there is a new mentality emerging that entrepreneurship is “fun” or that simply by starting a company you are instantly successful.

By very definition only 1% can become the 1%, which is why thousands of businesses fail each year. Starting a business can be exciting, rewarding, and profitable, but it probably won’t be “fun” in the conventional understanding of the word.

When starting a business ask yourself, “why am I starting this business?” This question helps you understand yourself. And then ask, “Is there need for my product or service?” This helps you understand the customer. And lastly ask, “What’s the best (most efficient, effective, and customer-centered) way of bringing my products and services to my market? This question will help you understand your action steps.

After asking those questions you’ll have an idea as to where your mind is at, where the customers’ minds are at, and where your next actions should be. While answering these questions thoroughly might not be easy, it will be highly beneficial to any rising entrepreneur.

Action steps: Ask yourself, “Why am I starting this business?”