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Savings

How to value money

Valuing money is the main topic of everyone who has large enough savings and does not want to leave them lying idle on a personal account.

However, few people realize that the value of money is not just about deposit or investment products. We can also benefit from the money by using it for business or by lending it to a trustworthy person who will repay it properly and on time.

Similar thinking leads to the fact that money can be used in such a way that it does not have an immediate effect. This means, for example, a situation where you increase your education or undergo a medical procedure. On the one hand, indirectly related situations affect the future acquisition of additional money. Even in this case, it will be an evaluation of them.

Money makes money

The appreciation of money seen from the above perspective thus takes on a whole new dimension. You don’t have to watch the interest rate, worry about inflation, taxes and fees. The only thing that is decisive is the money that will flow from the activities. It is reminiscent of the well-known bon mot that money makes money.

The establishment of a family, the acquisition of children and their upbringing work on the same principle. If there is no unpleasant reversal of life during the time when the mischief grows into adulthood, you have a high probability that your offspring will take care of you in old age. By this reversal is meant bad relationships in the family, where individual members of the family do not talk to each other, do not live together or some members have experienced pathological behavior in the form of homelessness and addiction.

Active and passive appreciation of money

To make it easier to understand, let’s discuss a few hypothetical ways to get the most out of money, which will be expressed by the profit of additional funds.

In practice, there are two approaches – passive and active. The passive approach is the standard deposit of money, for example on a term deposit or by buying shares. In this case, we will make one transaction with the cash already ready and wait for interest or dividends.

An active approach depends on our will, with money only having a supporting role. Starting your own business, but without registered capital, is more difficult for anyone who does not have enough financial resources. However, if you do not have to solve existential problems, you can support your business from the very beginning.