Saturday, April 6, 2013

Money!!

Money!!

mon·ey
noun, often attributive \ˈmə-nē\
something generally accepted as a medium of exchange, a measure of value, or a means of payment: as
a : officially coined or stamped metal currency b : money of account c : paper money

(Above is one of the definitions of money from www.merriam-webster.com. Most of the people need money for food, clothing, shelter, hobby and other bazillion things which may or may not make sense!!)

 ("Money" by Pink Floyd)

Have you ever wondered what is the ultimate source of your money? If you are earning, your immediate source of money would be your employer and if you are not earning, your immediate source of money would be your parents or friends or someone who has money and is willing to share some of it with you. 

But where do the immediate sources of money get their money from? For example, if you are employed by a company, the company is your immediate source of money. Let's suppose that the company gets its money by making profits out of its products (or in case the company is not in profit, it might get its money from some loaner. Company can mean any institution/enterprise which is employing people). To make matters simple, let's also suppose that the products are bought by some people having money. So, in this "simple" money-flow model, the flow of money is:

People-->Company-->Employees

The "People" in the model should have an immediate source of money which could be one of the two sources initially mentioned. Those immediate sources should also get their money somehow which results again in a model similar to the "simple" model. By extension, the flow of money is: 

People1-->Company1-->Employees1/People2-->Company2-->Employees2/People3-->....

This model could probably be extended over and over again which may or may not give a plausible answer to the question!

 There could be a feedback somewhere in the above flow, but it may not be straight-forward to find the location of the feedback. For example, some part of People3 could contribute to Company1 so that they are getting some part of the money they spent but unfortunately this is not always true. This simple model does not answer the question: "What is the ultimate source of my money?" but the answer could be that the source is distributed, just like the source of water in a river!!