Learning is a lifelong process. So when you have landed on this page. Your objective should be to maximize the intake of useful information in the minimum possible number of words. The world is governed by 3 main elements Power, Skills & Time. If you’re a master of any of the aforementioned elements then Money will automatically follow. In subsequent posts, we will expand our learning of these 3 words in conjunction with money. These simple & easy to understand words are the most misunderstood.

Illustration by Example

Why should we know about Power & Money?

Lakshmi ji & Vishnu ji photos

If we know exactly what is the true meaning & nature of power & money, it will help us in taking the decision with more rationality & accepting consequences with more reasonability. Power is the creator of Money. Money cannot create Power but its function is to aid the enforcement of power. To an extent, money gives an illusion of creating power but it is only a mirage, it can only create a collapsible structure similar to power but it cannot create absolute Power. To understand this relationship between money & power, we can take the example from Hindu Mythology where we can see the image of Lord Vishnu & Mata Lakshmi. Where Lord Vishu signifies power & Mata Lakshmi signifies abundance & prosperity.

What is the difference between information & learning?

Information is something that reaches you, whereas learning is what you do with the information. Learning is the process of refining the information by acting on it with a feedback loop mechanism, where each result refines the process.

learning about power
Learning Power Image Source – GE Power Conversion

Ideally, it is better to analyze the concept of money before understanding investment. Take it a step further and analyze Power, Skills, and Time before money & the entire picture falls into place. Learning all of this is necessary if we want to know & master our decisions.

Money can only be understood by humans because we have created it. All creatures on the planet understand actions, rewards and risks. Money becomes the medium of exchange that is valid while exchanging goods, and investments become good and time bound exchanges, savings become part of money earned and preserved, and bad decisions/actions become risks. This sort of a classification is very broad and there might be nuances and exceptions but by and large understanding it this ways provides a strong foundation for learning key concepts.

Investment is a very small portion of the money cycle but all of us are bound by it as if it is forever. Let us look at this aspect of money also. The inherent characteristic behind doing something with our savings is the act itself. We cannot contain our incessant urges to act because we are brought up in that manner or we can say that our mind constantly takes decision. Therefore when we see something idle we tend to put them to good/bad/any use that yield something in return.

Learning about the stages of life (Time Cycle)

Firstly, let us look at the different stages of human life. These stages help us in classifying our financial status & assigning a priority. Mostly, this is the case with most individuals. However, case-by-case differences can arise & there can be a significant number of exceptions within the following categories.

  1. 0-20 – Dependent
  2. 20-40 – Independent
  3. 40-60 – Responsible
  4. 60-80 – Dependent
  5. 80-100 – Dependent

The working age can be termed as the age from 16 years till 65 years maximum & peak time in terms of health, agility, enjoyment & responsibility is between 25 year & 55 years. Again this is a very broad classification, exceptions can & do exist but generally, this is the expected course of life. The graph shows the average household income in the USA.

Statistic: Median household income in the United States in 2021, by age of householder (in U.S. dollars) | Statista

As one grows old, there comes a time when a dependent individual becomes independent. The first such instance occurs at an age above 20 years & below 30 years and this can be termed as a transition age where an individual can apply his/her skills to accumulate money. This earning along with other sources of earnings clubbed together is known as the income of that individual.

Total Income – Total Expenditure = Savings. The savings of an individual is the most important asset not only for that individual but also for the system. Because this is the only thing that he/she will be able to safeguard, use & will be able to part away with to get his/her work done.

Income is not a solitary act. It requires time, patience, skills, learning, and practice. All of which create an ecosystem of people and productivity. Life is divided into stages at an individual level. However, in groups or communities, individuality has no existence. A group collectively behaves as an individual. To know how we unanimously came to this point or this system where we have to interact with other people to live a good life is of utmost importance to us. The study of our past is known as History. To understand our past we need a skill called Reading.

There is a very old adage and that is “History repeats itself”. To know the probability of what will be repeated in the future we have to read the past.

Barter System

Learning about Savings

The concept of savings dates back to 10000 BC when humans began the practice of farming. The saving for the future was done by storing grains in pots & granaries. This also led to the development of pottery. In modern times pots can be equated with banks. Banks hold money but they are also engaged in activity that lead to creation of money.

Slowly settlements began to exchange goods within themselves & with other settlements. This system of exchange of goods was called the barter system. The barter system worked on the principle of double coincidence of wants. This restricted the scale of exchange or trade. However, trade continued in relatively small quantities based on the needs. As the population increased this activity picked up the pace.

Ancient forms of Money
Ancient Money Image source Pinterest

To overcome this hurdle (the double coincidence of wants) the mathematical concept of Money was invented. Money always has an issuer be it ancient times or modern times. An issuer is always a powerful person, entity, institution, or nation. In earlier times whenever the issuer of the money became weak due to any reason. The money took the form of a precious, scarce, limited natural resource that is durable, valuable & universally acceptable. Hence we see bullion metals like Gold, Silver, and Platinum taking the form of money. An important learning from this paragraph is that during a time of crisis, bullion will have more value than other forms of money.

All of this resulted in, trades that were bigger in size can be executed & settled easily. It is important to know all this to expand the scope of our learning. Money derived its purchasing power from the issuer, and the exchanges, the issuer is usually a powerful person or institution or a country. Since there were many issuers in the past like we have many currencies today. It created a unique problem of standardization of money. Gold was used to overcome this problem.

In peacetime and in times of prosperity, anything can acquire the form of money if the issuer is powerful and strong enough to win the trust and enforce the obligation that comes upon issuance and circulations. The relative strength of the issuer gave rise to a system of currencies in modern times.

For efficient utilization of savings, we can split the savings part into two major components. This financial learning is important for every individual.

  1. Investments = Acceleration
  2. Insurance = Brakes

Investments can be risky and an individual investor can choose the risk. Highly risky activity includes trading time-bound contracts or new financial products such as cryptocurrencies. Trading and Investing are the activities of an investor. These activities are undertaken by an investor in financial instruments or Assets prepared by regulating agencies.

Learning about Insurance Products

It is very important to learn about insurance products. Insurance is a vast industry that works on the concept of risk pooling. Therefore it becomes important for us to learn about insurance products. There are two types of insurance.

  1. Life Insurance
  2. General Insurance
Learning the History of Insurance
Learning the History of Insurance

Free learning content

The objective of this material is to impart free and correct knowledge to the reader. Learning about different aspects of life is important to improve the chances of getting success in life.

  • What is the structure of Financial Markets?
  • What are the different types of assets? There are a number of them and it is important for us to review these assets to our advantage.
  • Types of Financial Investment products available in the markets?
  • What are the regulating bodies in the Indian Financial Market? To have an in-depth understanding of the Indian markets it is of utmost importance to have an understanding of the regulatory framework of India
  • How can you address Financial fraud? A lot of people are afraid to even enter the securities markets as they are unaware of the redressal mechanism at their disposal.
  • Why keep all your eggs in different baskets – Risk Management? Finally when we are entering into the market then “diversity seems to be the best policy to mitigate risk
  • What are bonds? How to invest in them?
  • How do trading in Equities, Commodities, Currencies, and Cryptocurrencies, and their derivative products like futures and options?

A systematic study will help an individual in the formation of the correct perceptions and analytical skills. The publicly available data will help us in simplifying the markets. It will also improve our ability to spot discrepancies. Therefore before an individual jumps into the stock/share/financial markets, they should know the answers to some of these questions related to the markets.

Learning to Trade

Trading is both technical and tactical. One has to be careful of the risks involved. Therefore we will study the below-mentioned topics before starting to trade. Our study will help us in dealing with the markets. All this will give us a brief idea of the setup requirements for handling our investments. Finally, this exercise will also set out our expectations of the returns. The absolute returns a person generates from the markets will depend on the skills learned from this website and other online sources. Trading purely relies on candlestick patterns and indicators, partly on fundamental analysis and news.


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