Money and Banking
It is difficult to imagine a world without money; every country has its own, and the history of money goes back to the earliest written records. Ideas about money are pretty much the same – you must have it in order to survive. From weekly allowances to monthly paychecks, everyone needs some kind of income. People work at jobs, trading their labor for the money they need to pay for the goods and services that make their lives comfortable. Many kinds of goods are traded in huge quantities all over the world, and businesses exchange currencies through international banking systems. Does money really make the world go around? In the modern world we live in today, it appears so.
The History of Money
Thousands of years ago humans had very few outside needs. Each family could depend on itself for survival. Later, the way of life changed. The population grew and more food was needed, so family groups moved from place to place. Traveling groups of people met and began to trade with one another. Then, man began to live in settlements or small towns, so land could be farmed and animals raised for food. Since people couldn't use all that they grew or made, they began to barter or trade the surplus. Farms produced enough food, so people had time to learn new skills and specialize in their work. There were many kinds of craftsmen and artists. Sometimes, a worker would trade a job for goods. Goods and supplies not available locally were brought from far away. To make trading easier certain objects were used as money, such as shells, tea leaves, tobacco, feathers, and salt.
Metal Used for Money
About 5,000 years ago a civilization in the Middle East began to melt silver into small bars to use as money. Other countries adopted the idea, and soon coins were made from gold, copper and bronze. Some coins were shaped like shells and animals; others were ring-like with holes in the middle.
Paper Money Invented
In 1295 Marco Polo returned to Italy from China with a new idea--money made of paper. The Chinese had been using paper money for hundreds of years! The Chinese did not have a large enough supply of metals to make all the coins they needed,
so they invented both paper and a printing process to create their money. Each paper note was guaranteed by the government to have a certain value.
Banks Used to Safeguard Money
The first modern public bank in the world opened in Spain in the fifteenth century. The word bank comes from the word banco which means bench or the counter where money was counted.
Banks make it easy to open basic accounts like checking and savings.
You need only to provide: 1) money to deposit, 2) identification such as a driver's license or passport, 3) a signature card which identifies your handwriting for future reference.
Most people think of banks as the safest place to keep their money because the governments guarantee against losses. Bank accounts also earn interest on your money and provide other services like investment programs, loans, and automated teller machines (ATMs).
Money Takes a New Form—Plastic
A credit card is a small piece of plastic that shows you are a customer in good standing with a credit company. They are really handy to use if you don't have enough cash.
However, if you can't pay the total amount at the end of the month you will be charged a high interest rate – some times as much as 20%.
Growing Your Money
Money doesn't grow on trees so it's wise to save and invest your bucks for retirement. You can buy stocks,
bonds, and mutual funds. The important thing is to diversify your investments. That way you won't lose all of it if the investment is not particularly a good one
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