Why is money so important?
Almost everything revolves around money. The food we eat, the water we drink, the house that shelters us, the electricity that gives us warmth, the clothing that we wear, and virtually everything is bought or has a cost. We can't deny that reality. Money is a fact of Life.
According to the encyclopedia, "Money is any token or other object that functions as a medium of exchange that is socially and legally accepted in payment for goods and services and in settlement of debts. Money also serves as a standard of value for measuring the relative worth of different goods and services and as a store of value. Some authors explicitly require money to be a standard of deferred payment.
Money includes both currency, particularly the many circulating currencies with legal tender status, and various forms of financial deposit accounts, such as demand deposits, savings accounts, and certificates of deposit. In modern economies, currency is the smallest component of the money supply.
History of money
The first golden coins in history were coined by Lydian king Croesus, around 560 BC. The first Greek coins were made initially of copper, then of iron because copper and iron were powerful materials used to make weapons. Pheidon king of Argos, around 700 BC, changed the coins from iron to a rather useless and ornamental metal, silver, and, according to Aristotle, dedicated some of the remaining iron coins (which were actually iron sticks) to the temple of Hera. King Pheidon coined the silver coins at Aegina, at the temple of the goddess of wisdom and war Athena the Aphaia (the vanisher), and engraved the coins with a Chelone, which is to this day as a symbol of capitalism. Chelone coins were the first medium of exchange that was not backed by a real value good. They were widely accepted and used as the international medium of exchange until the days of Peloponnesian War, when the Athenian Drachma replace them. According other fables, inventors of money were Demodike(or Hermodike) of Kymi (the wife of Midas), Lykos (son of Pandion II and ancestor of the Lycians) and Erichthonius, the Lydians or the Naxians. "
See web link, http://encyclopedia.thefreedictionary.com/Money .
To be practical is not simply being satisfied with this working definition. To be practical is not just accepting that money is a fact of life. For a practical mindset money is not just a neutral word as defined above. Well, it may be as important as any person could think, however, the practical mind sees money as having another definition. Money is a capital.
"Capital (money) used to fund a business should earn returns for the capital owner who risked their saved money. For an investment to be worthwhile the estimated return on capital must be greater than the cost of capital. Otherwise stated, the risk-adjusted return on capital (incorporating not just the projected returns, but the probabilities of those projections) must be higher than the cost of capital. "
See web link, http://encyclopedia.thefreedictionary.com/Cost+of+capital .
Therefore, the practical mindset is to construe money beyond being a fact of life but to use it as a capital to fund a business wherein the ultimate aim is to yield more money.
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