Picture or Pitcher?
Today, I want to draw a big picture of money. I hope you can wrap your head around it. Or, at least, I hope I can improve your mindset for money.
Although I know you would rather have a big pitcher of money, we need to know a little more about the world where your money floats around.
Where Does It Come From?
Every nation had to initiate a currency for exchange to support their economy. Inside each nation, the citizens must have a means to buy goods.
The United States of America uses the US Dollar. In the United States, we have the Federal Reserve that creates the cash, the money.
How Does It Work?
The markets establish the value of cash. How much will you have to pay for something depends on several factors:
Demand – How many want that?
Supply – Is there enough for everyone?
Location – Available all around me?
These are referred to as economic principles. However, that is not the whole framework. I will share more details, in later posts.
There is a worldwide currency market related to imports and exports of goods between nations.
So Why Should I Care?
I know you live in your own little world but sometimes you have to go out into the rest of the world to buy things you need.
Again, the markets determine what you can buy and how much you will pay!
Does the Pandemic and toilet paper ring a bell?
To Some It Is a Game
Can you believe some people make a living by trading in commodities (raw materials, like metals and grain) and trading stocks and bonds, which are funding for companies that make goods or packaged foods or provide services surrounding the processing or delivery of those goods, which are made from commodities?
Meanwhile, we, as citizens, go to the store and decide what we can buy based on what we want, what is available, and how much money we earned and saved or how much credit we have available to us. Shop well and maybe you can win the game!
Make Knowledge Part of Your Mindset for Money
You must live with money. It is the means by which you make choices related to things or services you need or want.
Read about the subject when you can. The more you know and understand about the world of money the more confident you will be making decisions about your income, your expenses, and the potential accumulation of assets to support your retirement.
I want you to have a good mindset for money. I want you to have a satisfying experience with money.