When a certain income threshold is reached, a person always begins to think about accumulation. Both a modern person and a person of an earlier culture will think about how to preserve available wealth and increase it. For all the time of its development, examples of means of accumulation have changed and modified. At the moment, money is the most famous and popular means of saving. However, not the only one.
Definition
According to the definition, something that has the equivalence of the value of a good or service and is saved for subsequent exchange can be attributed to such funds.
In the definition of money, the role of the only means to preserve values is not assigned, since a lot of other things not directly related to money may have the same properties. Such freedom of choice allows a person to find his way to accumulate and increase his financial condition.
Accumulation process
Accumulation itself is not as simple as it might seem at first glance. In addition to the usual process of storing a certain amount of funds for exchange, there are also the following methods of accumulation:
- Using banking services such as deposits.
- Investment savings.
- Savings in the form of certain wealth or luxuries.
However, money as a means of accumulation nevertheless plays a major role in modern economic relations. Since they are the equivalent of the cost of almost any product or service, highly liquid, and also quite universal, they are easy to move from the buyer to the seller. But in addition to money, there are alternative options on the market for saving wealth.
Saving Methods and Their Types
Since many values fall under the definition of means of accumulation, we consider the main and most recognized by people:
- For investment accumulation, specialized investment funds are most suitable: stocks, bonds, and real estate. Since investment is a long-term investment of one’s wealth in something with the subsequent receipt of income from an investment project, the main selection criterion for a person who decides to invest is precisely income. That is, from time to time, the investor receives cash or other payments from the accumulated funds that he invested. Such projects are called assets.
- Saving money in luxury goods or antiques is not an investment in the strict sense, since a thing does not generate income in the process of its storage by a person. The savings methodology, therefore, is designed for the subsequent increase in the value of antique or expensive goods.
- Banking services offer savings programs, such as deposits or deposits. Separately, it must be noted that deposits and deposits are precisely savings programs, but in no way earnings. Earnings on bank deposits is a myth, since the interest rate allows you to save funds from inflation (depreciation), but not to increase them. Each banking organization has its own conditions for granting deposits, but the mechanics of this accumulation technique are the same: the client gives its funds to the bank for a certain period, and during this time the bank is obligated to pay the client the percentage agreed in advance.
Of course, the given examples of accumulation means are far from the only ones. However, at the moment they are the most popular and famous.
Conditions for fulfillment
First of all, the potential means of accumulation must have liquidity, that is, the ability to be equivalent to the value of the maximum number of goods or services. In addition, it must be mobile so that there are no obstacles to the exchange during the process itself. It should also be suitable for the form of accumulation chosen by man.
Money and its versatility
Money is perhaps the most famous and popular means of saving since the beginning of its creation. They were created solely as a measure of value, and without them it is currently difficult to imagine the economy as such. The cost of each product is expressed to a certain extent the money that the buyer must give for the purchase of this product. And the simplicity of the exchange process makes them incredibly convenient. Therefore, they are the first that comes to mind as an exemplary means of accumulation.
