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In developing countries that tend to have a more recent and extreme history of currency devaluation, people often put more thought into what type of money they hold. In developed countries in particular, people often just hold the currency of that country.
![five dollar bills usd five dollar bills usd](https://image.shutterstock.com/image-photo/five-dollars-bill-closeup-on-260nw-366133730.jpg)
However, depending on where they live in the world, people are not very accustomed to keeping track of the quality of money itself, or deciding which type of money to hold. They either figure out a strategy themselves and manage that, or they outsource that task to a specialist to do it for them to focus more on the skills that they earn the resources with in the first place. Many of them do, however, invest in expanding a self-owned business or in educating themselves and their children, meaning they invest in their personal lives, and they might share in their community as well, through religious institutions or secular initiatives.Īmong the minority that do invest in financial assets, they are generally accustomed to the idea that investments change rapidly over time, and so they have to put a lot of thought into how they invest. The majority of people in the world don’t invest in financial assets they are still on the consumption stage (basic necessities and daily entertainment) or the saving stage (money and home equity), either due to income constraints, consumption excesses, or because they live in part of the world that doesn’t have well-developed capital markets. In many ways, this can be considered a form of investment in the ongoing success and stability of our larger community, which is probably why we are wired to want to do it. Share: When we share, or in other words give to charity and those in our community, we give some portion of our excess resources to those that we deem to be needing and deserving. There are personal investments, like our own business or education, and there are external financial investments in companies or projects led by other people. This serves as a higher-risk, less-liquid, and less-portable amplifier of future resource consumption potential compared to money. Invest: When we invest, we commit resources to a project that has a decent likelihood of multiplying our resources but also comes with a risk of losing them, by trying to provide some new value to ourselves or others. This serves as a low-risk battery of future resource consumption across time and space. Save: When we save, we store our resources in something that is safe, liquid, and portable, a.k.a. It’s an important question to ponder because we basically have four things we can do with our resources: consume, save, invest, or share.Ĭonsume: When we consume, we meet our immediate needs and desires, including shelter, food, and entertainment. How could something so simple and so universal, take so many different forms? People spend their lives seeking money, and in some ways it seems so straightforward, and yet what humanity has defined as money has changed significantly over the centuries.