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The Time Value Of Money
By: Collin Brown
It is very important for one to understand the time value of money. Especially
we should let our next generation know about it. As the sea wave keeps on coming
without any hesitation, life also flows on. It is important to make a child
understand about the journey of time along with the changing value of life.
Do you see people using the old coins nowadays? I am sure you do not. But you
remember them as your grandmas must have kept a few. This paisa is to be kept in
with you only as they are not in use. Similarly, today we can buy things with a
10-rupee note, right? If I give you a ten-rupee note, you can immediately go to
the next shop and buy a chocolate for you. Do you think even after a couple of
years you will get the same chocolate with 10 rupee? I do not think so and I am
sure you will agree with me, too.
Let us think about your latest toy, which your father bought you last week. The
latest remote controlled car cost him 200$. My dear, you won’t believe that I
bought this car just a year back for 120$ only!! Now, you might think that, as
there are the changes in the newest model, so the company has increased their
price. Yes, you are right to some extent but there are other reasons too. You
know that the price of everything is increasing day by day. So to retreat the
market value one has to increase the price. The cost this company used to spend
after the toy has been changed. Now, as the new technology has come within a
year, they also had to improve the quality of their toy. If they did not improve
it, you would not ask me for this toy, right? Tell me if it would not be as
sophisticated as it is and better than your previous ones, then would you like
to buy this? No dear, you would not, nobody does. It is the market where
everyone wants something better and thus, the price is getting higher
accordingly.
In your childhood when you used to collect donations for the poor kids, how much
people used to contribute? I think people used to give you Rs. 5 minimum. Now,
if you ask for that, you will not get less than Rs. 10 from a person. It is
because earlier value of Rs. 5 is almost equal to value of Rs. 10 these days.
You hardly get anything with Rs. 5 now, while you will get a chocolate, a packet
of potato chips or may be a small toy at Rs. 10. Even you can get a pen at Rs.
10. So, are you with me? Do you understand the difference now?
One more example will be suitable for you to understand the matter. What is the
price of the cricket bat you want to buy for yourself? Aren’t you saving your
pocket money to buy that this year? Now, now, you are caught! I knew it, do not
worry, everyone has his secret desires and I also had this once. Let me share a
story with you. When I was a kid like you, one day I went to the market with my
mother. There I liked a talking doll and it was saying “mummy mummy” and “pappa
pappa”. It was so adorable that I wanted to buy. However, my mother did not have
that money to buy me then so she rather bought me something else. Well, I came
back, but the dream of having the doll with me stayed. That year I did not buy
anything in the Pujas and saved the money. Then again in the festive season I
did not buy a new dress and saved the money instead. After that I told my mother
to buy me the doll with that saved money. Wow!! It was a lovely experience when
I got to get that doll from my saved money. That was a superb feeling indeed. I
have told you this small story because I know some of you must be saving your
pocket money for your desired “thing”. If it is a Cricket bat then I am sure you
need not save as much as I had to. Now if you don’t buy 1 dress in a Festival or
just save 4/5 months’ pocket money you will be able to buy it. this is because
what I used to get as pocket money was lesser than you. The reason is, the value
has been changed. If I give you the same amount, which I used to get as a kid,
it won’t be suitable for you. Thus, the change takes place in our lives too.
I think it is now clear to you how the value of money changes with time. Now,
one most important thing. You should realize the value of money as well. Do not
ever waste money unnecessarily. It is a curse to you if you do so. The God will
be angry with you and you will be in trouble. Save money as this plays a major
role in your life. If you understand the value of saving and not spending it
without necessity then you will surely have a bright future.
However, the value of money changes with time yet the concept of money never
changes. It never looses its importance in our life. Ask your grandma about
their life. You will be amazed and astonished with the description. Sometime you
might feel that she is just telling stories!! Well, it is not so. After a long
when you will become a grandma and your kids will ask you this, they will be
equally shocked to know that you used to get a chocolate at Rs. 10!
As a growing kid, you should realize this. It is very important to understand
the basics of life. One of the major things is this, to understand the time
value of money. I am sure you have understood this well and do not have any
doubts in mind. There are certain things, which cannot be told, you have to
realize them from your heart. Other things I have tried to tell you so far.
About the Author:
Author: P.C http://www.lifeinsurancepad.com
http://lifeinsurancepad.com/resources.htm
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