What is Money?
- Money is a medium of exchange in the form of banknotes or coins generally accepted for the payment of goods and services.
- Money in real terms represents value which can be alternated as a product or service being paid for, such as healthcare services, food, shelter, education, etc.
- Money is an object considered to be the currency used and spent in a particular country.
- Money is an asset that appreciates over time, only based on how it is used.
What an individual uses money for determines the growth the asset brings in return, money increment relies on this factor. Research has shown that the best way to make your money value keep appreciating is by investing now for future rewards.
To further explain this, here is an analysis:
Between June 2021, and June 2022, dollar-to-naira exchange rate has risen from N500 to N603 at the parallel market, This means as a Nigerian, the value of your investment in dollar will only rise as opposed to the falling value of naira. Currently, the value of a dollar is N705, as at the time of writing (July 2022), a dollar is equivalent to N680. This analysis shows that from June 2021 – June 2022 , 1$ ⇄ N603
And from June 2022 – July 2022, 1$ ⇄ N705
However, money can be used for different purposes.
Earn and Spend:
This is the first thing that crosses many individual minds, when there is money, every individual want to spend it or perhaps purchase different things that may be both assets or liability but as humans, we have been advised severally to pay attention to our spending. Also, it is important to know that there is zero or less money growth in earning and spending.
Earn and save:
The word “save” has been used from centuries back even before the establishment of financial institutions. Though return on investment on saving is usually very low but it has been considered the best option for low risk takers. One good fact about saving is the creation of emergency funds. A person who saves has access to his/her money anytime but without interest.
Earn and Invest:
This is the best option or plan for money increment. For instance, a person who saves N100,000 for one year will get back his 100,000 but a person who invest N100,000 in stocks will get back his N100,000 with 12 % minimal interest. Alongside this, with the current rise in dollar value, the currency (dollar) has proven to be worth investing in.