moneywise

Money

is a medium of exchange in the form of coins, bank notes and digital balances

Currency

the type of notes and coins accepted in a particular country and is usually issues by a central bank​

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Portable, Acceptable​, Durable​, Divisible​, Recognisable​, Scarce​

Characteristics of Money​​

P.A.D.D.R.S.

Portable

Easy and convenient to carry around​

Acceptable

If people are not willing to accept something as valuable, it cannot be used as money​

Durable

Able to be kept and re-used for a long time​

Divisible

Can be easily divided to allow for small transactions

Recognizable

Should be easy to identify and people should feel confident that it is difficult to counterfeit​

Scarce

Money should not be easily accessible, it should equate with production of goods or services​

Medium of exchange​, Store of value​, Measure of value​, Standard of deferred payment​

4 Functions of Money​ ms ms

Medium of Exchange​

anything used to facilitate trade between parties, with currency being the modern form.

Store of value

An asset that can be saved, retrieved and exchanged at a later time, and still be useful when retrieved ​

measure of value

Common benchmark to designate the prices of goods throughout the economy​

Standard of deferred payment​

the accepted way to settle a debt in the future, allowing for "buy now, pay later" arrangements like loans.

Bartering

exchange of goods/services for other goods/ services between parties

investment

using money to make profitable returns e.g. interest, income, appreciation in value (capital gains)

savings accounts, term deposit, real estate, shares, starting a business, crypto, collectibles

investment options (7) sa.td.re.s.sab.cc.c

spend, save, invest

things to do with money

savings account

Definition: Bank account that earns interest, Benefits: Safe, accessible, Risks: Low returns, loses value to inflation

term deposit

Definition: Fixed savings with locked-in interest, Benefits: Secure, guaranteed earnings, Risks: No access until maturity, misses rate rises

real estate

Definition: Buying property for rent or resale, Benefits: Long-term growth, rental income, Risks: Expensive, hard to sell, market drops

shares

Definition: Ownership in companies. Benefits: High growth potential, Risks: Can lose value quickly

starting a business

Definition: Creating and running your own company. Benefits: Full control, big profit potential. Risks: High risk, no guaranteed income

crypto currency

money that’s secure and runs online without banks—shared and managed by people using a blockchain

Collectibles

unique items (art, stamps, cars) are bought & sold. Value driven by scarcity, history, and enthusiast demand.

Needs, wants

are essentials for survival (food, shelter), desires that improve life but aren't essential (new phone, luxury car)

Goods, Services

x= tangible items you can touch (phone, food). y= intangible actions performed for you (haircut, advice).

Demand & Supply

x is how much buyers want and can afford. y is how much sellers offer and can produce.

Seasonality, Surplus, Shortage, Price

Factors Affecting Demand/Supply SSSP

Seasonality

Time of year (e.g., swimsuits in summer).

Surplus, shortage

supply>demand, demand>supply

Price

High price usually lowers demand, increases supply (and vice-versa).

retail Market

Where goods & services are traded betweenconsumers & producers(e.g., supermarket, car dealership)

Financial Market

Where money is exchanged between the lender and borrower -interest= price of lending and borrowing (e.g., loans and deposits)

Labor Market

employees sell labour to emplyers who adverticee jobs, just services (e.g., job boards, recruitment agencies).

stock Market

shares(units) of companies(sellers) sold to shareholders, share value depends on company profit e.g ASX

retail, financial, labour, stock

Types of Markets

dividends

distrubution of a company’s earnings that goes to shareholders

capital gains

increases if calue relative to og price

risk

possibility of losing some/ all of original finances used in investment

reward

profit from an investment

market

a place where buyers and sellers make transactions directly or via intermediaries(middle man)

diversification

splitting investment over multiple assets