How Money Works
I read the the book How Money Works with a view to explain some concepts to my children and found the book very helpful – both the visual displays and the narrative – all concepts were easy to follow
The book is divided into sections like Profit Making, Financial Institutions,Government Finance and Public Money and Personal Finance
I have summarised some of the main concepts within the above sections that I taught my kids
- Interest Rates – price charged by lender to borrower
- Inflation- the general increase of average prices in an economy, accompanied by a decrease in the purchasing power of money – this leads to a rise in the cost of living
- Shares – when an individual invest in shares they are buying “a share” of a business, meaning they are part ownership of that company. Shares can be bought and sold and they fluctuate in value
- Converting income to wealth – high earnings alone do not guarantee wealth- keeping outgoings lower than income and generating savings and investing these savings wisely is a key to long term financial security
I really enjoyed this book as it was easy to read and follow and my kids loved it as well – understanding the basics gives you valuable insights into understanding the bigger issues