Why Money is Needed ???

Money seems to divide the world into the have’s and have not’s. Given this disparity, one might wonder why money is needed. Well, here is your answer!

Why Money is Needed

In the beginning of the social interaction between human beings, the barter system worked quite well. The barter system is basically a trade arrangement and requires that two or more parties have a mutual desire to trade and have goods that the other one wants to acquire. In the small and primitive cultures of pre-history, this was often enough. The only commodities that anyone had any interest in were food, clothing, and weapons. If one man had a weapon, and the other had some food, a deal could be easily arranged.

The barter system could not last forever. It was because of the ability of the human mind to under stand symbols and to assign value to them that we were able to develop a means of moving past the barter system. Money became the means by which civilization and socialization took place. Now, when a person wished to do something beyond the production of the basics, such as a work of art, he did not have to wait for someone willing to trade the food he desired for his art. He could trade the art for money, and trade the money for the food. Money became the middle man that allowed diversification and growth.

Money had to accomplish three distinct missions in order to become a workable replacement for the barter economy. It had to be a medium of exchange. This means that people needed to recognize its value and be willing to except it in trade for goods or services. This acceptance and recognition had to be universal within the society. If your money was not accepted for the goods or services you desired, it was worthless.

Money also needed to be a unit of account. This means that it must have a set value that could be assigned to a product or a service to determine where it stood in the overall economic picture. If you made a piece of art, you needed to be able to set a money value on it, and that same money value needed to be accepted by a food merchant. In the barter system if one art piece was worth four cows, then the cows must have a value of one unit of money and the art piece must be worth four units.

You must also be able to store the money at value. This means that the money and its value had to be durable and relatively unchanging. This means that you did not have to go and buy four cows as soon as you sold your art piece. You could save your money, and accumulate it for use at another time. This was the beginning of the idea of wealth. Money has been called the root of all evil, but actually it is the root of all growth.

Interesting Facts About Money

They say money makes the world go around and it is pretty hard to argue otherwise. Here are some interesting facts about money that you might not know.

Interesting Facts About Money

The first money was what is called a commodity money system. The money was actually some type of commodity that had an intrinsic value, but was used as a medium of exchange. In ancient Mesopotamia, the shekel was actually a certain volume of barley. In early Europe, salt was used as money. In the Sydney Bay colony of Australia, rum was used as currency. Colonial Virginia used certain cash crops such as tobacco, rice, and wheat.

The first paper money issued by the United States Government was printed in 1862. The reasons were the shortage of coins and the need to finance the Civil War. People were hoarding coins because they were made of precious metals and confidence in their value as currency was fading quickly. The first United States bills were intended to replace these coins and were issued in denominations of one cent, five cents, twenty five cents, and fifty cents.

The modern one dollar bill has an average lifespan of about seventeen months before it wears out. The larger denomination bills tend to last much longer because they are not used as frequently. The one hundred dollar bill usually is good for at least five years. If all of the one dollar bills that wear out in an average year were put into a single stack, it would reach 200 miles into the sky.

The Bureau of Engraving and Printing is the Federal agency charged with the printing of money. Each day they print around 35 million bills worth around $635 million dollars. This does not mean that the money supply increases by this amount every day. At least 95% of the bills printed each year are intended to replace the bills in circulation that have worn out.

Money has been the subject of our desires and a cause of our problems for as long as we have used it. It is said that money is the leading cause of disagreements in marriage. In the First Epistle to Timothy 6:10, we are told that the love of money is the root of all evil. It is calculated that if you had 10 billion one dollar bills and you spend one every second of every day, it would be 317 years until you finally went broke. Money has come a long way since the days when people would pay their bills with bushels of barley, or bottles of rum. It can be expected that money will change even more as we move into the future.

The Worlds Billionaires : Rank 5 - Mukesh Ambani

Mukesh Ambani Rank 5

Rank: 5

Net Worth: $43.0 billion

Asia's richest resident heads petrochemicals giant Reliance Industries, India's most valuable company by market cap. His fortune is up $22.9 billion since last year, making him the world's second biggest gainer in terms of dollars. The biggest gainer was his estranged brother Anil, who ranks 6th in the world just behind his older brother. The sons inherited their fortune from their late father, renowned industrialist Dhirubhai Ambani. But they couldn't get along and in 2005 their mother brokered a peace settlement breaking up the family's assets. Mukesh is using some of his money to build a 27-story home.

The Worlds Billionaires : Rank 4 - Lakshmi Mittal

Lakshmi Mittal RANK 4

Rank: 4

Net Worth: $45.0 billion

Heads world's largest steelmaker, $105 billion (sales) ArcelorMittal, which accounts for 10% of all crude steel production. Just delivered 580 tons to be used in construction of the World Trade Center memorial in New York. With 44% stake, is the company's largest shareholder. Longtime resident of London is Europe's richest resident.

The Worlds Billionaires : Rank 3 - Bill Gates

William Gates III RANK 3

Rank: 3

Net Worth: $58.0 billion

Harvard dropout and Microsoft visionary no longer the world's richest man. Blame Yahoo: Microsoft shares have fallen 15% since the company boldly attempted to merge with the search engine giant to better fight Google (nasdaq: GOOG - news - people ) for Internet dominance. Gates is preparing to give up day-to-day involvement in the company he cofounded 33 years ago to spend more time focused on his philanthropic endeavors. Bill & Melinda Gates Foundation has $38.7 billion in assets, donates to causes aimed at bringing financial tools to the poor, speeding up the development of vaccines (for AIDS, malaria, tuberculosis), bettering America's lagging high schools. Sells 20 million Microsoft shares every quarter, proceeds going to private investment vehicle Cascade (nyse: CAE - news - people ) more than half of net worth now outside of Microsoft. Company spent $6 billion to land Web ad firm Aquantive last May. Would-be rival to Apple (nasdaq: AAPL - news - people ) s iPod, the Zune, not yet a hit. Believes Microsoft's far-flung bets, including 10-year affair with Internet-based television, may soon pay off; says next 10 years will be the "most interesting" in software history.

The Worlds Billionaires : Rank 2 - Carlos Slim Helu

RANK 2
Carlos Slim Helu & family

Rank: 2

Net Worth: $60.0 billion

Second-richest man in the world this year; even richer than Microsoft's Bill Gates, at least for now, thanks to strong Mexican equities market and the performance of his wireless telephone company, America Movil (nyse: AMX - news - people ) The son of a Lebanese immigrant, Slim made his first fortune in 1990 when he bought fixed line operator Telefonos de Mexico (Telmex) in a privatization. In December, America Movil struck a deal with Yahoo (nasdaq: YHOO - news - people ) to provide mobile Web services to 16 countries in Latin America and the Caribbean. A widower and father of six, Slim is a baseball fan and art collector. He keeps his art collection in Mexico City's Museo Soumaya, which he named after his late wife. In recent years, he has donated close to $7 billion worth of cash and stock to fund education and health projects, and to the revitalization of Mexico City's downtown historical district.

The Worlds Billionaires : Rank 1 - Warrent Buffet

Warren Buffett

Rank: 1

Net Worth: $62.0 billion

America's most beloved investor is now the world's richest man. Soared past friend and bridge partner Bill Gates as shares of Berkshire Hathaway (nyse: BRKA - news - people ) climbed 25% since the middle of last July. Son of Nebraska politician delivered newspapers as a boy. Filed first tax return at age 13, claiming $35 deduction for bicycle. Studied under value investing guru Benjamin Graham at Columbia.

Took over textile firm Berkshire Hathaway 1965. Today holding company invested in insurance (Geico, General Re), jewelry (Borsheim's), utilities (MidAmerican Energy (other-otc: MDPWL.PK - news - people ) , food (Dairy Queen, See's Candies). Also has noncontrolling stakes in Anheuser-Busch (nyse: BUD - news - people ) Coca-Cola (nyse: KO - news - people ) Wells Fargo (nyse: WFC - news - people ) Insurance operations flourished in 2007. "That party is over. It's a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008." The Oracle (nasdaq: ORCL - news - people ) of Omaha issued a challenge to members of The Forbes 400 in October; said he would donate $1 million to charity if the collective group of richest Americans would admit they pay less taxes, as a percentage of income, than their secretaries. Had long promised to give away his fortune posthumously. Irrevocably earmarked the majority of his Berkshire shares to charity in 2006, mostly to the Bill & Melinda Gates Foundation. Gift was valued at $31 billion on day of announcement; donation will far exceed that sum so long as Berkshire shares continue to rise.

Warren Buffett is the richest man on earth ???

Forbes magazine has reported that Warren Buffett has overtaken his friend Bill Gates to become the world’s richest man.

In fact, as per the report Carlos Slim has also overtaken Gates and is now the second richest man in the world.

Bill Gates has been listed at the third spot in the Forbes Magazine’s annual ranking of the world’s wealthiest people.

As per the report, Buffett is said to be worth around $62 billion. Slim’s worth is around $60 billion. Gates’ worth is $58 billion.

This is big news considering Gates had been dominating the list for 13 years. Looks like the struggling Microsoft stock has finally taken the top spot from Gates.

Warrent Buffet - becomes world’s richest’ ???

US investment guru Warren Buffett has ousted his friend and occasional bridge partner Bill Gates as the world’s richest man, Forbes magazine says. The Microsoft co-founder had topped the Forbes business magazine’s rich-list for the past 13 years. Mr Buffett’s wealth increased by $10bn (£5bn) last year to $62bn. Mr Gates’s fortune climbed by $2bn during the same period, dragging him down to third on the list with a fortune of $58bn. He was narrowly pipped into second place by the Mexican communications magnate Carlos Slim Helu, whose $60bn net worth has doubled in the past two years, Forbes reports. A record 1,125 individuals with a combined net worth of $4.4 trillion made it into Forbes’ 2008 list of billionaires. The reason for this explosion in wealth is that we’re in the midst of a phenomenal global boom,” said Steve Forbes, chief executive of Forbes magazine.

“Never before in human history have so many people in so many parts of the world advanced so quickly economically as has happened in recent years.” Two-thirds of those on the list are classified as self-made billionaires, and 50 of them are under the age of 40.

Mark Zuckerberg, 23, the founder of the social networking site Facebook, joins the list as the world’s youngest billionaire. His $1.5bn fortune makes him the world’s 785th richest person, Forbes reports. Patrice Motsepe joins the list as South Africa’s first black billionaire with a net worth of $2.4bn. The world’s richest woman is the French L’Oreal chief, Liliane Bettencourt, 17th on the Forbes list with a net wealth of $22.9bn. Other inclusions in the ultra-rich list include US chat-show host Oprah Winfrey, ($2.5bn), property mogul Donald Trump ($3bn), and Harry Potter author JK Rowling ($1bn).

Wow. JKR’s a billionaire!? That’s pretty cool. I inspired a billionaire!