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Money. Nature and function. Guidelines of wise usage

 Money is anything that is generally accepted as a means of paying for goods and services. Before it was invented, people “bought” what they needed by trading they services or possessions. But today if you try to buy an airplane ticket and if all you had to offer in exchange was milk from the family cow, how much milk would the ticket may cost? With money in your pocket, you can go to travel agent and get a ticket without any trouble.
Money is a token of wealth with three main functions. First, money is a medium of exchange, a tool for simplifying transactions between buyers and sellers. Money also functions as a measure of value, so you don’t have to negotiate the relative worth of dissimilar items every time you buy something. Furthermore, money serves as a store of value. Unlike many goods, it will keep. You can put it in your pocket until you need it, or you can deposit it in a bank.
Most of us have a limited supply, earned through hard labor. To make the most of every penny, we must follow these 20 suggestions:
Know your current financial status, your current needs for money – and your goals.
Don’t procrastinate. If your goals are ambitious, it will be easier to achieve them if you start right now.
Put aside a part of every paycheck for your own future. You won’t get anywhere if everything you earn goes to pay others.
Buy only what you must, and buy wisely.
Avoid high-interest loans.
Don’t buy too much life insurance. You only need to leave your dependents with enough to maintain their current lifestyle.
Learn about income taxes.
Distinguish between spending and investing (it is better to buy computer you need to work, but not if you just want the prestige of having an expensive computer).
Learn about all the different kinds of investments and the way they make your dollars grow.
Invest only in things you understand.
Seek investments that meet your needs: don’t wait for someone to sell you something that may not be right for you.
Hedge against economic uncertainty by diversifying. Keep some money in a savings account or money-market account in case you need cash quickly.
But don’t over diversify. You’re better off holding a few investments that you can watch carefully.
Be objective about your investments.
The overriding principle of investing is to buy low and sell high.
Don’t plan on making a fast killing. Very few bargain-basement investments take off overnight.
Think in terms of purchasing power, not dollars. If the money you invest cant buy more after a reasonable amount of time, it isn’t a good investment.
Take advice only from qualified people.
Invest where you have an advantage. If you’re familiar with the computer industry, invest in computer stocks.
Invest in your career. Some of the best returns come from the money you spend to get yourself the knowledge.

MONEY AND POSSESSIONS MAKE THE WORLD GO ROUND

What is money? A valuable piece of paper some would probably say and they would be awfully wrong then. Money exists in various forms such as stocks, realty even our stuff at home, but that’s not the point here. Money is something essential to us, something that keeps us alive nowadays as we need to buy food and satisfy at least our basic needs to survive. Therefore we become or actually we have already become consumers and we just can’t get away from this living style as we are influenced by various factors such as commercialism, fashion and the view of society every day.

First of all we need a clarification of the term consumerism to find out what is the way that we live in. Consumerism defines our personal happiness which we seek in consumption and purchase of material possessions. This is a definition for the whole process named in the title: we work to get money to satisfy our needs, we work all the time as traders can always offer us more and improved goods which we can’t resist not to purchase. The producers of these goods aren’t concerned to make them ideal or at least in an extremely good quality, because when they produce imperfect goods they can improve and change them to the infinity, thus making us buy them if we want to stay up-to-date. So again, we work, we get money, then we buy stuff, we work and we buy more stuff – this vicious circle keeping the economy high never stops, even the economical crisis which we are going through now doesn’t stop this, it only reduces it. Therefore money and possessions really are what makes the world go round.

But we wouldn’t consume if we weren’t convinced to do this. There are three main influence factors which are closely related to each other, these are: commercialism, fashion and society. Various advertisements surround us everywhere, we go to work we see hoardings, we go to hang out somewhere in the city we get various leaflets in the streets, even when we get home and watch TV we always here the advertisements telling us, that we’re not enough good the way we are and the only solution to correct this is to go purchase something – here comes fashion. It creates the view that if we don’t stay up with it, we won’t be as valued as others who do. Generally it affects our minds, creates stereotypes which we have to cling on, thus we lose our own opinion about what is beautiful and what isn’t. Fashion is also influenced by society, with already affected minds, which functions similar to the commercialism. People socialize with each other only if the person they want to meet with fits the stereotype created (by fashion or that same society), thus if we want to communicate with more people we are forced to follow this stereotype. Since the world gets more and more material, society prefers the rich, who are described as the upper or the VIP stereotype, often they’re even regarded as the perfections of the society.

All in all, money is just an implement to fit in the outward, the more you have – the better you’ll be treated as in that case you’ll be able to purchase more. Perhaps, consumerism is the engine which drives the world round and keeps us in good and improving living conditions, but it also affects people not to have their own opinion and to rely only on stereotypes created by the material side of the world, thus making them lame.

TODAY’S BANKING ENVIRONMENT

Between 1933 and the late 1970s, banking was a highly regulated industry. An elaborate network of state and federal laws controlled what a bank could do, where it could operate, and what it could pay interest.
The regulations had the effect of creating a fragmented financial system in which specialized institutions were granted exclusive rights to handle certain types of transactions in protected geographic areas. Commercial banks offered checking services and lent these deposits primarily to businesses. Thrifts mainly offered savings accounts and lent these funds largely for home mortgages. Investment banks helped businesses raise funds through the sale of stock. Other services related to money handling, such as insurance and real estate, were provided by firms that weren’t banks at all.
This segmented approach worked well until inflation pushed interest rates to double-digital level in the 1970s. Then investors began to pull their funds out of banks and thrifts, which operated under government-imposed interest rate ceilings, and invested elsewhere. At the same time, the pioneers in limited service banking were discovery legal loopholes that enabled them to compete with banks without abiding by the same restrictions. Stung with troubles on two fronts, banks and thrifts cried foul.
In the wake of deregulation, the lines between different kinds of financial institutions are blurring. Banks and thrifts are getting into many new businesses, including investment banking, real estate, insurance, financial counseling, tax preparation, and credit.
The fact that banks and thrifts are now free to pay competitive interest rates has solved one of their biggest problems: the mass exodus of funds whenever interest rates rise elsewhere. Nevertheless, the deregulation of interest rates temporarily put the squeeze on the financial industry’s profit, because banks and thrifts were suddenly forced to pay more for their raw material – money. The pressure was especially intense on the thrifts, which were loaded with old, long-term fixed-rate mortgages. Most commercial banks, in contrast, have a mix of short- and long-term loans and are thus in a better position to pass on the cost of funds to borrowers.
Meanwhile, in an effort to salvage their profits, bankers began scrambling to find borrowers. The competition was particularly fierce because many large corporations had reduced their use of short-term bank debt and were using other forms of financing.
Deregulation is also prompting bankers to search for new ways to cut costs and raise revenues. They are controlling their expenses by reducing their staffs, hiring more part-timers, automating more functions, closing little-used branches, limiting the services offered at most branches, and concentrating expensive services at just few. Recently, some banks have even installed more surveillance cameras to cut down on the number of lobby guards.
While the banks are striving to raise profits by reducing costs and increasing income, they are also pushing to expand geographically. States may band together to create regional banking zones in which commercial banks may operate freely. At the same time banks outside the region may be kept out.
Bank safety is important factor in today's environment. All nationally chartered banks, and some state banks, must participate in the Federal Deposit Insurance Corporation (FDIC). The FDIC insures depositors for up $ 100 000 per account if the bank should fail. If a member bank is on the brink of closing, the FDIC may arrange a merger with another bank. The FDIC also sets guidelines for safe bank policies and sees that those guidelines are followed.
The Federal Savings and Loan Insurance Corporation (FSLIC) provide the same services for its members as the FDIC provides for banks that fall under its protection. The FSLIC is neither as large nor as strong as the FDIC.
Deposits in most credit unions are insured by the National Credit Union Insurance fund.

RISKS OF CONSIGNING A LOAN

Consigning a loan (sharing responsibility for a loan) may easily become a costly nightmare, because people don't fully appreciate the risk until after they've done so.
Consigners frequently believe they are simply vouching for a borrower's character rather than assuming any financial responsibility. But consigners are vulnerable to lender actions. Generally, a lender is legally free to seek repayment from a consigner even if the lender hasn't exhausted all means for collecting from the borrower. Lenders, moreover, usually aren't even required to notify a consigner if the borrower misses a payment.
Lenders are legally obligated to spell out the risks to consigners. Lenders must reveal the fact that they may choose to seek money from consigners without first going after the borrowers; that lenders may sue consigners; and that a consignor’s credit rating may be hurt. Lenders must also advise potential cosigners that they may wind up liable not only for the debt but also for possible late fees and collection costs.
Consigning a loan may make emotional sense even to a person aware of the risks and under some circumstances may even make economic sense.
Consigning may also enable a perfectly trustworthy friend or relative to get otherwise unavailable credit and thus establish a favourable credit history. But a consigner with this motive needs to make certain of whose credit history the loan go into. If the borrower is a minor, some lenders keep record for the consigners only.
Consigners needn't be entirely at the mercy oh lenders. Before signing, for example, some consigners get lenders to agree to notify them if the borrower misses a loan payment. The consigner may use his or her influence with the borrower and at least will have some warning that a loan is in trouble.
Consigners can also shop around for lenders willing to exempt them from liability for late charges and legal fees or otherwise willing to limit liability.

FORMS OF UTILITY. MARKETING FUNCTIONS.

Power of a good or service to satisfy a human need is called utility. There are four types of utility, one of which is created by production activities and the other three - by marketing activities.
Initially, a company buys raw materials or parts, which it uses to produce something, so consumer value created by transforming inputs into products is form utility.
To be of real value, the product has to be available to potential buyers at a convenient place and time. Place utility is consumer value added by making a product available in a convenient location; time utility – consumer value added by making a product available at a convenient time. Consumer value created when someone takes ownership of a product is called possession utility.
One of the reasons the American Marketing Association had so much trouble defining marketing is that marketing is a complex aspects of business. Even in very small businesses, marketing functions are often divided among employees. In a two-person consulting firm, for example, one person might focus on selling the firm’s services to potential clients while the other specializes in producing the service. In giant corporations, entire departments comprising hundreds of people are assigned to undertake each marketing function in each division.
Three general categories – exchange functions, physical distribution functions, and facilitation functions – encompass a variety of more specific tasks. Exchange functions, which include selling and buying, are the foundations of marketing. Of course, businesses sell their products to other organizations and to individuals, using personal selling, advertising, sales promotion, and publicity. But in order to have something to sell, a company must first buy things – raw materials, parts, equipment, and finished goods – as well as services of employees who create products from these inputs.
Another important aspect of marketing – physical distribution – includes transporting and storing. To get goods or services to customers, a company must deliver them, using the most efficient mode of transportation.
The facilitation functions include financing, bearing risk (always exist possibility that people will not buy enough product), standardizing and grading (companies always classify products by quality and quantity), and securing information. 
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