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What is Money for? Where does Barter come into play?

C

Charmed

#1
Dear All:

In another thread, I noticed we were discussing whether Money is Motivator - especially can we motivate employees.

Here's an article that talks about money from a different perspective. What is money for ? What do you do with money?

......The whole point of money is something different. I learned about that one long-ago day in June in Anchorage, Alaska, of all places.

......I had simply been following the advice handed down by my mother, a woman shaped by the Depression. Her mantras, repeated in word and in deed: live below your means, invest for the future, stay out of debt.

Read on and see what the author says.

Charmed
 
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S

SteelWoman

#2
Nice article - it exactly reflects my own thinking. I live in a very modest house with a small mortgage I'm working hard at paying off specifically because doing so will provide me with additional options. I didn't always follow this philosophy - came to it later in life - but I'm no longer one of those who thinks you might as well buy the latest/greatest car or the biggest house you can possibly own "because you're ALWAYS going to have a mortgage/car payment." Not necessarily, and living modestly with no real debt provides a greater level of FREEDOM than all those possessions. If something unexpected were to happen I'll be okay, which as the article points out is WONDERFUL.
 

Marc

Fully vaccinated are you?
Staff member
Admin
#3
Charmed said:
In another thread, I noticed they were discussing whether Money is a Motivator.

What is money for ? What do you do with money?

......The whole point of money is something different. I learned about that one long-ago day in June in Anchorage, Alaska, of all places.

......I had simply been following the advice handed down by my mother, a woman shaped by the Depression. Her mantras, repeated in word and in deed: live below your means, invest for the future, stay out of debt.
Cultural Anthropology 101 - Money is part of the barter system. A 'standard' is (was) set (in the 'long ago' days it was basically weight an equation dependent upon the 'item' (beaver skins, or whatever). One uses 'money' to trade for 'goods' one does not produce. Nothing more, nothing less.

In the US today, there exists only speculation (e.g.: went off the 'gold LONG standard').


I wouldn't begin to speculate the pros and cons....
 

Wes Bucey

Prophet of Profit
#4
Money is merely the fungible medium of exchange and "storage" for "barter credits" one builds up. By using the medium of exchange, a farrier (horseshoer) doesn't have to wait until a miller needs horsehoes for his animals until the horseshoer can trade for grain or flour. Similarly, a hunter who travels on foot would have no need of horseshoes, so how could the farrier get meat and furs?

As societies become more complex and distances between various producers and consumers becomes greater, the medium of exchange becomes more and more fungible, until in the present day, the physical specie (the actual hard cash) is replaced by ones and zeros in a computer somewhere which acts as the Exchange. This "virtual Exchange" is what allows us to use credit and debit cards and deal with minor adjuncts like Pay Pal and checks. Soon, "smart cards" which carry the data about balance and transactions right on the card in real time.
 
C

Charmed

#5
Money - when you don't have it

Dear All:

Natural disasters like the tsunami that we have witnessed , terrorism (9/11 in the US and 3/11 in Spain) and war all teach us how fragile the "economic" system is. Money, if you think about it, is just a means of "bartering". So many cows, or so many gallons of milk equal so many dollars. Or, a car equals so many dollars. If you want a modest house, we can ask someone who wants the 5 cars to let you have their house and take your 5 cars. But this is seldom possible. So we deal with money instead.

When the tsunami hit, many of the Western travelers lost everything - including their money. I remember the story of how one European traveler was learning to "bond" with Indians after the tsunami attack. They helped him not only to recoup from his bodily trauma but also helped him by giving him money! The aid that is pouring in from all over the world is in the form of money, which can be used in many different ways to rebuild many shattered lives, if used wisely.

By the way folks, sorry, I can't help taking this analogy further. So, here it goes.

The science of thermodynamics deals with energy, especially energy in the form of heat. The law of conservation of energy was formulated, in the middle of the 19th century, only after the nature of heat was understood (it was not well understood in Galileo's and Newton's days).

However, to develop this science, we must define what we mean by the idea of temperature. When two bodies, at different temperatures, are brought into intimate contact, something happens. That something is called the flow of energy in the form of heat. An instrument called the "thermometer" senses this flow of heat. When body A (the thermometer) is brought into contact with body B (whose temperature is being measured), the thermometer reading begins to change and then, after some time, the readings stop changing. The final reading is the temperature of body B. Now, we repeat with body A, the thermometer, and body C. If the reading is the same, body B and body C are at the same temperature.

Money plays the same role in economic transactions. When commodity A is compared to the money or dollars (which acts like the thermometer reading), and commodity B is compared to money or dollars, we know which is at a higher temperature (more energy, or money). That's what I have been trying to do in the other thread (New Meaning of Planck's theory, no moved to Coffee Break Chatter forum)

By the way, both Galileo and Newton experimented with different types of thermometers. Newton also formulated what is called the law of cooling which is still being used in forensics to estimate when a person died. (The body cools off at a certain rate, exponentially, which can be used in the investigations.)

Charmed
 
C

Charmed

#6
Money and Happiness

Content deleted. I don't think we need to go into that subject matter, Mr. Charmed.
 
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C

Charmed

#7
Owning a franchise

Dear All:

The following is the link to a "junk" email is received today. However, it also suggests an interesting view of money, wealth building, or success. Owning a successful franchise, as discussed here, may be one way of making (a lot of) money and achieving all the dreams that wealth brings.

*** Junk Link REMOVED ***

Anyone here who has considered owning a franchise as the method of achieving their financial goals?

Charmed
 
Last edited by a moderator:

Wes Bucey

Prophet of Profit
#8
As a former SEC-registered Investment Adviser and "boutique" investmentment banker, I can say categorically that many, if not most, of the folks who leave the corporate life and plunge their 401k and other savings into franchises and entrepreneurial operations lose the bulk of their invested capital.

The ones who do NOT lose their investments are divided into two remaining groups, one large, one VERY small.

Group 1 is super successful, growing the business and adding additional personnel and/or locations. It is a very small group.

Group 2 has essentially traded one "job" for another "job" and do not make much more on their invested capital than if they had invested in mutual funds. They do not grow their business and rarely are able to delegate the day-to-day operation to others, but must remain on site in "operations" rather than focusing their minds and energies on strategies and plans for growing the business.

I don't think it (mediocrity or failure) has anything to do with the individual business or franchise, because the success stories of the stellar few are real stories. I think it has to do primarily with the mindset of the individuals involved. Most folks are not psychologically prepared to go from being an employee to being a boss overnight. The stress is even worse on folks who come from big corporations with layers of support people taking care of "details." Folks from big corporations are the most likely candidates for the cradle to grave blanket of a big successful franchise (McDonald's comes to mind) where there are still layers of support staff creating advertising, menus, performing bulk purchases, creating procedures, and following up to help underperforming franchisees. Even McDonald's, though, has store closings and frequently buys out dissatisfied franchisees to resell to another aspirant with entrepreneurial spirit.

Lesser franchises don't have the depth of personnel or financing to do that.

For those of you who are of a certain age, what happened to some of those franchises from your youth?
Little Caesar's Pizza
Chicken Delight
Burger Queen
Arthur Treacher's Fish and Chips
Long John Silver
Yankee Doodle

How about sports teams or leagues?

Egghead and other computer-themed outfits?

If you are fed up with the corporate life and aiming to be an entrepreneur (consultant?) or franchisee, please do some extensive research BEFORE you take the plunge. Your spouse and family will thank you for the consideration.
 
C

Craig H.

#9
Wes:

Interesting observations. May I add some?

The differences that I notice between the successful business owners I know and myself do indeed stem from a different mindset. First of all, once they have competent people in place, they get out of their way, while making sure their employees have what they need. I envy a couple of people I know who seem to have lots of time to hunt and fish whenever they want to. When I first met one of them a few years ago, i wondered who was minding the store. Surely he would lose it all. The fact is that he was minding the store, from a telephone, and his employees knew where to reach him if he is needed. This allows him to hunt, fish, and look for other opportunities. Sweet.

Another difference to me is their ability to prioritize without even seeming to know that they are doing it.

Having one's own business is a dream many of us share, and there can be great rewards, but, as you noted, Wes, the challenges and risks can be great.
 

Al Rosen

Staff member
Super Moderator
#10
Wes Bucey said:
As a former SEC-registered Investment Adviser and "boutique" investmentment banker, I can say categorically that many, if not most, of the folks who leave the corporate life and plunge their 401k and other savings into franchises and entrepreneurial operations lose the bulk of their invested capital.

The ones who do NOT lose their investments are divided into two remaining groups, one large, one VERY small.

Group 1 is super successful, growing the business and adding additional personnel and/or locations. It is a very small group.

Group 2 has essentially traded one "job" for another "job" and do not make much more on their invested capital than if they had invested in mutual funds. They do not grow their business and rarely are able to delegate the day-to-day operation to others, but must remain on site in "operations" rather than focusing their minds and energies on strategies and plans for growing the business.

I don't think it (mediocrity or failure) has anything to do with the individual business or franchise, because the success stories of the stellar few are real stories. I think it has to do primarily with the mindset of the individuals involved. Most folks are not psychologically prepared to go from being an employee to being a boss overnight. The stress is even worse on folks who come from big corporations with layers of support people taking care of "details." Folks from big corporations are the most likely candidates for the cradle to grave blanket of a big successful franchise (McDonald's comes to mind) where there are still layers of support staff creating advertising, menus, performing bulk purchases, creating procedures, and following up to help underperforming franchisees. Even McDonald's, though, has store closings and frequently buys out dissatisfied franchisees to resell to another aspirant with entrepreneurial spirit.

Lesser franchises don't have the depth of personnel or financing to do that.

For those of you who are of a certain age, what happened to some of those franchises from your youth?
Little Caesar's Pizza
Chicken Delight
Burger Queen
Arthur Treacher's Fish and Chips
Long John Silver
Yankee Doodle

How about sports teams or leagues?

Egghead and other computer-themed outfits?

If you are fed up with the corporate life and aiming to be an entrepreneur (consultant?) or franchisee, please do some extensive research BEFORE you take the plunge. Your spouse and family will thank you for the consideration.
Good advice.

In answer to your question, some are still here.

Little Caesars

Arthur Treacher's Fish and Chips

Long John Silver

Yankee Doodle
 
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