The Velocity Of Money

In today's world, parking your money is no longer a way to become rich. Instead, you may even become poorer given the powers of rising inflation. Because of this, you must increase theC90-06A productivity of your money. To do so, you must understand the velocity of money because if you can move money fast, you gain wealth more quickly than others.
By definition, velocity of money simply means how productive your money is. Here, we should aim to keep input (time, effort, risk) at the minimum and increase output (value, productivity). As a result, velocity of money is output divided by input. In global economic terms, it can also mean GDP divided by money supply.
To increase the velocity of money, we ought to make use of a powerful tool called leverage. For example, writing a book can reach more people than a seminar because books can target a global audience while seminars only target a local audience with the requirement of your presence.
Here, it can be seen that creating derivatives of yourself prevents you from falling into the trap of trading your time for money. Instead, you exchange the value you create for more money.
In addition, velocity of money also increases if more exchanges can be made with the same amount of money. This will increase the amount of wealth created. For example, you lend $10,000 at 10% interest and $1,000 is to be returned every month. In 1 year, you earn 120% and this was possible because you increased the velocity of your money, thus creating more wealth.
Another way to increase the velocity of money would be more simultaneous use found for each unit of money. For example, you invest in real estate instead of stocks. InsteadC90-07A of just earning money, you now also earn increased cash flow (from rent), reduced risk (because investment is collateralized), increased tax deductions, fosters business environment, an appreciation in value of property and greater liquidity (as physical asset can be sold).
Given the variety of intangible benefits you can derive from a decision, every simultaneous use of money allows you to gain more wealth as these advantages you receive are financially healthy. As a result, you gain money faster and can reinvest these returns to reap greater profits. As a result, the velocity of money becomes significantly increased and people who utilize C90-08Amoney this way become richer.
In conclusion, after covering the important concept on the velocity of money, I believe readers are now better equipped with knowledge on how to create wealth. Without delay, set your goals and write out the plans to achieve them!