Daily Money Minute

Fotolia_54867638_XS_7“Whether you are rich or poor, if you don’t understand the value of money you’re not going to get the best out of it.” ~ John Hannah

Money provides us with the means for keeping score. A system for storing the value of our labour, providing us with a credit which we can then use when we are ready to purchase goods and services which result from other peoples’ labour. However the question is always, ‘What is something worth?’ Essentially the answer to that is, ‘Whatever someone is prepared to pay.’ Knowing that comes down to judgement and judgement comes from personal experience and an understanding of markets. It is all about having the instinct for what people will pay. Price is what you pay but value is what you get. A low price doesn’t automatically mean great value; and a high price doesn’t necessarily mean poor value. Generally we get what we pay for. However some people are very good at spotting a bargain. They will snap up an item at a price which is below what the market would normally pay for it. Recently I was watching the British TV programme ‘Flog it’. This programme revolves around the value of antiques. One lady was showing an ornate Chinese box which she had purchased at a Car Boot Sale for just £1. In the course of the programme that antique was sold at auction for £850. Now there’s a very smart lady. She spotted an item and intuitively she recognised that it was worth much more that the asking price at the boot sale. Understanding value is the first step in making the best use of your money.

© Roy Sutton and Mann Island Media Limited 2013. All Rights Reserved.

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