Prices Increasing soon Prices Increasing Soon

Beginner’s Guide to Money!

Money is the one of the most important elements in our life. After all, it makes the whole world go round. Everyone talks about it all the time, be it the public or the politicians. Everyone wants to be a billionaire, fast and easy. But the bitter fact is, there's no secret recipe for making money. The first step to make money is to understand what it is. The money has become such an obvious thing in our lives that we have forgotten, what it is essentially. So here's a fool's guide that takes you back to the basics of money and tries to give simple answers to not-so-simple questions.

Read more
Gets ₹1 Cr. Life Cover at just
COVID-19 Covered
The Policybazaar Advantage
Dedicated claim support for family FREE
Upto 10% discount for buying online
Only certified experts will call you on 100% recorded lines
We are rated~
rating
6.7 Crore
Registered Consumers
51
Insurance Partners
3.4 Crore
Policies Sold

#All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply

By clicking on "View plans" you agree to our Privacy Policy and Terms of use

~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

Life is Unpredictable! Protect your family’s future
Get ₹1 Crore Life cover starting from ₹384/month+
+91
Secure
We don’t spam
Check Your Premium Now
Please wait. We Are Processing..
Get Updates on WhatsApp
The Policybazaar Advantage
Policybazaar Advantage Icon
Dedicated claim support for family FREE
Policybazaar team will help and support you at the time of claim. A personal claim handler from our team of experts will get in touch with you when your nominee applies for a claim on our website.
Policybazaar Advantage Icon
100% calls recorded to ensure no mis-selling
We will make sure you get what is promised by the advisors. We conduct regular monitoring of our calls to make sure you get the best experience.
Policybazaar Advantage Icon
Exclusive lifetime discount upto 5% for buying online
The discounts will be valid for the entire policy payment term and is not available if you choose to buy the insurance through offline agents.
Policybazaar Advantage Icon
Advisors available in your city
Our advisors are available in more than 55 cities across India and can help you at your doorstep in understanding the plans and in documentation.
Policybazaar Advantage Icon
Refund at the click of a button
In case you aren’t happy with your purchase, you can cancel your policy hassle-free at the click of a button. We will help you with the cancellation and refund of your policy.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

What is money after all?

Money can be defined in many ways.

  • It is a medium of exchange that was introduced to simplify the complex barter system.

  • It is a certificate of the common perceived value of a thing.

  • It is an instrument of standardizing and storing value for a good or service.

Why do people prefer depositing their money in banks instead of locking it in treasure chests or hiding it under a mattress?

The reasons are numerous. Starting with the most obvious, depositing it in the bank rather than keeping it at home reduces the risks of it being stolen. Further, depositing it in the bank lets you earn an interest on it. Plus, you get to carry the money in the form of cards and cheques instead of having to carry the actual heavy cash. Anyway, the money isn't supposed to stay in lockers as it works best when moving around.

Why doesn't a country print lots and lots of money and make everybody rich?

Gold has a high value, not because it shines but because it is a rare commodity. Currency is no different. The thumb rule to every asset is, the more available it is, the less valuable it becomes.

If a country decides to print lots and lots of paper money, it'll lead to a currency devaluation. Here's why, when the amount of currency increases, the value of goods and services spreads out (thins out) according to the increased currency thus making every unit more costly.

Put simply, an increased supply of currency without any increase in the supply of good and services will end up raising the cost of goods, thereby disbalancing the economy. To get an understanding, suppose there are 100 bananas in the market and 100 rupees is the total amount of currency. Thus, a person gets 1 banana for 1 rupee (Rs 100/ 100 bananas). Suppose out of charity, the government decides to print additional 50 rupees and distribute it among public. Now, the total currency is 150 rupees while the bananas are still 100 in number. A person now will have to pay 1.5 rupees for buying 1 banana (Rs 150/100 bananas).

As can be seen from the above example, the more currency the government prints, the less affordable commodities are going to become. There has been quite a few incidents in the past as a testimony to this fact. Germany decided to print more currency between the year 1921-24 to get over the after effects of world war I. The implications were shattering. At that time, the value of German mark fell so drastically that '1 American dollar = 4,210,500,000,000 German marks'.

To summarize, if everyone has more money, it'll end up making everything more costly. And we'll not be better off than before, as a matter of fact, we'll find ourselves in a much worse situation.

What is Inflation?

Inflation is when the value of a currency falls over time. The higher the rate of inflation, the lower will be the purchasing power. Inflation is the culprit that brings down the value of your hard earned savings by decreasing the present monetary value of your savings. The law of supply and demand is the simple underlying mechanism behind inflation. As the population is on rise, the demand for goods or services is on rise as a result of which they getting more valuable and costlier with time. So you need more bucks to buy the same product after a span of time.

Consider this, the rise in prices leads the workforce to ask for higher wages, the higher wages in return leads again to rise in prices. Thus, inflation is a fire that keeps fueling itself.

How to Combat Inflation?

The best way to counteract inflation is to make a timely investment in an asset that assures a higher rate of return than the rate of inflation. Suppose you have 1000 rupees today and the present inflation rate is 7%. If you want to neutralize or win over inflation, you'll have to make an investment that yields a rate of return not less than 7%.

How do Banks Create Money?

Banks create money by lending the money to borrowers and earning the interest. The money a bank lends come from the pool of money made out of the individual deposits in a bank. A portion from this pool is kept in the reserves (about 10%) and the rest is lent out (90%).

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Can Money Buy Happiness?

No, it cannot! Money is often confused with wealth but the truth is that it's not the real wealth. The real wealth or the real value is in goods and services and not in the money. Money in itself is a valueless thing. If you find it hard to digest, imagine yourself marooned on an island with a treasure box but nothing to eat or no clothe to wrap around. In such a case, all the treasure you have will be as worthless as pebbles.


Premium By Age

Life insurance articles

  • Recent Article
  • Popular Articles
24 Apr 2024

Most Common Life Insurance Frauds in India

Life insurance fraud is a financial crime that can be committed

Read more
09 Aug 2023

What High Net Worth Individuals (HNIs) Do To...

High net worth individuals often opt for life insurance plans to

Read more
28 Jun 2023

A Review Of ICICI Prudential Life Insurance

“Policy Bazaar insurance clarified the term policy for me, so

Read more
27 Jun 2023

A Review Of HDFC Life Insurance

“I recently bought an HDFC term plan and it is the best

Read more
20 Jun 2023

Best Life Insurance Policy in India with High...

The best life insurance policy in India is a type of life

Read more
15 Dec 2021

Life Insurance for Parents in India

With the increase in the average life expectancy rate, the older population in India is on the rise. Most of the

Read more
08 Jun 2022

Life Insurance for NRI

Going beyond geographical boundaries to study or pursue a career abroad is a common aspiration for many

Read more
14 Apr 2014

Life Insurance Quotes

Life insurance quotes are the approximate premium rates for the specific life insurance policy. It helps you

Read more
26 Dec 2022

Canara Guaranteed Fortune Plan

Canara HSBC life insurance company introduces a guaranteed fortune plan that provides assured benefits to life

Read more
27 Jun 2023

A Review Of HDFC Life Insurance

“I recently bought an HDFC term plan and it is the best decision I have ever made. I feel so good knowing that

Read more
Need Help? Request Callback
top
View Plans
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL