It all started with a conversation. “Kshitij I have no money”, told his mother. I want “Let’s go to the bank and get the money “, Shrishti told her a toy!! mummy. “It’s so simple”, continued Shrishti, “you go to the ATM machine, put the card, tell how much cash you want and you get it”. “No, no darling. Bank is only a place to keep money. Papa goes to office and he gets paid at the end of the month. That money goes to the bank.” “Just like you pay Gauramma to clean our house and vessels”, said Shrishti.(is this a question?Then: “Just like you pay Gauramma to clean our house and vessels?”, asked Shrishti. ) “Yes”, said my mother, “Papa works hard, so that we can have a good life.” “I don’t need so much money and I love it when Papa plays Suduko with me”, said Shrishti. “Okay darling, Papa will not go to the office from tomorrow”, said mummy. “Tomorrow I shall ask Gauramma not to come to our house for cleaning. Mummy will clean the vessels, Shrishti will clean the house. No money; no Gauramma.” “But mummy, I have to go to school”, said Shrishti. “Sorry beta, no money, no school. To study in school, one needs to pay school fees. And also, no newspaper from tomorrow, no money, no newspaper”, said mummy. “You need money for all this!” exclaimed Shrishti. “You need money to pay for vegetables, to buy toys, to pay for services like the maid, the driver”, explained mummy. “Hmm, if we need money, why don’t we open a shop like supermarket, then we can sell things”, suggested Shrishti. “It is not so simple to open a shop. Tell me, where will you open the shop, how will you get the things to sell, how will you get people to buy from your shop?” asked mummy.

Fortunately the bell rang and I, the mother was saved. The kids ran off to play and I started thinking: should I explain to my kids about money? They think parents are their ATMs (Any time money) or that money grows on trees. My first question was: Should we teach our kids about money?

“Money is one of the most important subjects of your entire life. Some of life’s greatest enjoyments and most of life’s greatest disappointments stem from your decisions about money. Whether you experience great peace of mind or constant anxiety will depend on getting your finances under control. -Robert G. Allen.” Money has an important place in our life. In school we are taught so many subjects but none of them is related to money. Yes, we do learn about Profit/Loss, Simple Interest/Compound Interest, but in school,l we are more concerned about solving the questions, but by and large, we pick up information about money from our parents.

There are two ways of looking at teaching kids about money:

Many people feel that we should not speak to children about money, as they feel they were not taught about the same by their parents. They learnt it as they were growing up.

There is another group of people that feels that children should be spoken and taught about money. “Rather than give a hungry man a fish, it is far better to teach him to fish for himself, then he will have food of his own for lifetime”

We are hearing about job cuts, recession, salary cut, and stock market collapse almost everyday. These problems have risen because of the sub prime mortgage. This shows that the world is flat or as they say, “When America sneezes, the world catches cold.” There have been lots of stories about how people are reacting to the economy slowdown. It reminded me how important it is for individuals to be financially literate.

We start learning ABC at the age of around 3 or 4 and when do we learn about finance? I remember how my hands shook when I had to write my first cheque or when I started earning money. My investment decision was to give my money to my parents so that they invested it on my behalf. How I wished that someone then could have explained me about the basics of money.

I felt that forewarned is forearmed and so decided to explain to my kids about money. I searched the internet looking for information but most of the information was related to the sites in US and it was very spread out. So, I decided to write this book.

This book is my humble attempt in explaining the concept of money to my children. This book is my tribute to my parents and in-laws who have had a great influence in my life.

What is Money? ...... 4 Money ...... 4 Money Cycle ...... 5 Purpose of Money ...... 5 How important Is money? ...... 8 Indian Currency ...... 9 Bank Notes ...... 9 Coins ...... 13 Indian mythology & money ...... 17 Lakshmi...... 17 Kuber...... 18

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What is Money?

Money

Let me ask you a question. Do we need money? If yes, for what? Well, we need money to:  Buy things such as food, clothes, cars, CDs, books etc.  To pay the maids, the milkman, drivers, doctors, to pay for school fees etc.  To go to restaurants, movies, travel etc.

Without money, one cannot eat, one has no place to sleep,one cannot have clothes. Money pays our bills, it buys things for us.

So what is money? When asked there are varied answers.  Rupees  Coins  Money in the piggybank  Money in the bank  Cheques  Gold  Silver The truth is, money does not have to be paper money and it does not have to be coins or gold or silver. Throughout history, a wide variety of items such as large stone wheels, tobacco, beer, dog teeth, porpoise teeth, cattle, metal coins have served as money.

“Money does not occur in nature. Money like language is uniquely human” ---Jack Weatherford

If money can be anything, then what is the basic purpose of money? It is a medium of exchange; anything that enough people will accept as payment for something. As people use money to buy, it passes through many hands including

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individuals, businesses and banks. When one person or group spends money, another person or group earns money. Money is moving in a never ending cycle just like the water cycle which results in clouds.

Money Cycle

Let us say Ishani is going out with her parents to buy a dress. Before going to a mall, Ishani’s father goes to the ATM to withdraw money and give it to his wife. Ishani goes to a mall with her mother, chooses and buys an awesome dress for Rs 1000. Her mother pays money to the shopkeeper, Mr. Shyam.

When Shyam goes home that night, he needs to fill some petrol in his car. To pay for petrol, he uses the money that Ishani’s mother gave him. Arjun, the owner of the petrol pump buys vegetables with the money he got from Shyam, who got it from Ishani’s mother. Shyam gives some money to his child Rita & some to his wife Sunita. Rita puts it in her piggy bank.

Next day Sunita pays electricity bill and goes to the bank to deposit the money. She also buys a new computer game for her son Ishaan. This game was written by MySoftX Company. MySoftX has a lot of people working in his company who make games. Ishani’s father is one of them. At end of the month, the salary for Ishani’s father is deposited to his bank account. So you see, money is always on the move.

Why did Mr Shyam accept Rs 1000 from Ishani’s mother? Because he knew that he can use it later for buying or paying for services. So, money is nothing but a medium of exchange. What if you convince Mr. Shyam to accept your doll/cricket bat/drawing for the new dress? Then, the doll/cricket bat/drawing is the money.

Purpose of Money

So, what is money? Money serves three purposes:

Medium of Exchange People accept money to buy goods and services. It should be portable or easily carried from place to place. Can we use rocks as money? No, as they would be so heavy to carry from one place to another. Money must also be divisible. What if you want to buy a candy worth 50 paisa or Rs 1? What if the chocolate is for Rs 10 but you have Rs 50. Then you should be able to get Rs 40(50-10) back. Money should be available in different denominations

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Standard of Value People measure the value of a service or good with money. For example, price of 1 kg onion is Rs 15, while one Barbie is Rs 400. So, which is more expensive? A dress costing Rs. 1000 is worth twice as much as another dress costing Rs 500.

Store of Value Money can be saved and used in the future. If you put Rs 5 in my piggy bank and then take it out after a month or a year, you would be able to use it. To be a good store of value, money must be durable. Can we use tomatoes as money? N,o as tomatoes will perish after a few days.

Across the globe and in human history, different things have been used as money such as sea shells, cows, cigarettes, tobacco, beads, chocolates, metals like copper, nickel, gold, silver & paper. Let us evaluate some items to see how well it would serve as money item, that is, how well it would perform the functions of money.

 Salt: It is easy to carry but for large quantities, carrying would be messy. It can be divided into grains. Would you take 100 grams of salt in exchange for your toy? No, its acceptability is doubtful. It can last for some time but not for a long time.  Wheels of large stone: Carrying it would be difficult. It cannot be divided. It can last long.  Cow: Cannot take it to different places. There are many kinds of cows, so it is not uniform. They are not durable as they die & they cannot be divided.  Gold: Is uniform, easily acceptable. Can be divided but for big purchases, carrying Gold would be difficult.  Paper: Serves all the functions.

Money comes from the Latin word Monte, which is the namr of the place in Rome where money was first made & stored.

While a number of "things" have been used as money, some have worked better than the others. Those "things" that did not work so well, were replaced by other "things" that worked better.

9000-6000 BC-Cattle & Agricultural crops: The earliest things used as money were cattle and agricultural crops.

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1200 BC - Cowrie Shells: Shells of clams, called cowrie were first used as money in China. They were found in shallow waters in Indian & Pacific Oceans. Till the 20th century they were still being used in Africa.

1000 – 600 BC - Crude coins made from non-precious metals. They first appeared in China & were not valuable.

700 BC-Precious Metal Coins: In the Western world, coins were made in Lydia, modern day Turkey. The coins, unlike in China, were made from gold and silver. They were stamped with Gods & emperors. Greeks and Romans also made coins of precious metals.

Due to shortage of copper, the Chinese started using paper money way back in 618-907 A.D. In 1300 AD, money was crude paper made from mulberry bark & the Chinese placed the emperor’s seal on it. Around 1454 A.D. the Chinese abandoned paper money. It reappeared in Europe and America in 1600 A.D.

As different things have been used as money in human history, money is called by different names such as: Buck: In North America, people used skin of deer for exchange. The skin was referred to as buck. Fee: In German fee is called as ‘vieh’ which means cattle. This implies that cattle were used to make payment in Germany. Shell-out: In America & later in Europe, people used shells to pay for things. Hence the word, “shell-out’ which means to pay. Cash: Latin root of cash would be caspa meaning “case” or “container.” Word cash meant a “box to keep money in”. The “box” meaning was the original but has disappeared from English now.

Moolah, Dough, Cash are the other names of money.

Once upon a time, there lived a poor widow with her son Jack and a cow. They had no food to eat. So the mother asked Jack to sell the cow and get some gold coins. We can use the gold coins to get food and clothes. As Jack was going to the market place, he met an old man. Jack exchanged his cow for five beans. The old man said, "if you plant them over-night, by morning they grow right up to the sky."

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When he reached home his mother asked him, “How much did you sell the cow for?” When Jack told her for five magical beans, she was angry at him. She threw the beans out. That day Jack had to go to sleep on an empty stomach.

1. What did the mother ask Jack to sell the cow for? 2. Was Jack’s mother happy when Jack returned with the magical beans? Why not? 3. Why cannot beans be used as money?

In everyday speech, we use the word "money" in a variety of ways, such as "My father makes a lot of money," or "Bill Gates has more money than anyone else," or "Reliance Industries made twice the money this year than it did last year".

Let us see what does money in each of the sentences mean. "My father makes a lot of money,” --- money means income or how much does my father earn. "Bill Gates has more money than anyone else"-- means how much wealth Bill Gates has. "Reliance Industries made twice the money this year than it did last year" means how much profit or net income did Reliance Industries make.

How important Is money?

Money is valuable. You cannot live without money. Money helps you in life but it is not everything. On Your birthday would you have the birthday party with your friends or would you have lots and lots of money?

If someone offers you Rs 1 lakh and in return asks for your hand, will you take the money and give him your hand? I am sure not.

Like other things, money too has a place, but then lots of other things are valuable too - your parents’ smile, your teacher’s compliment, your friends’ pranks, the beautiful moon or a colorful sunrise.

King Midas

Once upon a time, there lived a king named Midas. He had lots and lots of gold and the more he had, the more he wanted. He would spend days counting his gold.

One day a stranger appeared and told King Midas that he would grant him a wish. The king was delighted and immediately said, “I would like everything I touch to turn to

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gold.” The stranger asked the king, “Are you sure?” .The king replied, “Yes”. So the stranger said, “You will have the golden touch.”

King Midas did not believe it. He thought he must be dreaming. When he touched his bed, it turned to gold. It was true-everything he touched did turn to gold. He touched the chair, the table and it turned into gold. After touching all the things in the room, he got tired and decided to read a book. As soon as he lifted the book, the book turned into gold. He could not read it. He sat down to eat his food, the moment he touched the fruit, it turned into gold. Even the glass of water turned into gold. He was hungry and he said to himself,“I can’t drink or eat.” Just then his daughter came running into the room and King Midas hugged her and she turned into a gold statue.

The king bowed his head and started crying. The stranger appeared again and asked if the king was happy with his golden touch. The king said, “No, I am the most miserable man on the earth.” He cried and asked for forgiveness. He said, “I will give up all my gold,but please, please give my daughter back.” The stranger reversed the spell. King Midas got his daughter back.

Money cannot buy happiness. Money is important no doubt but one should not run after it at the cost of ones study or health or relationships.

“Money can be translated into the beauty of living, a support in misfortune, an education, or future security. It can also be translated into a source of bitterness.”-- Sylvia Porter (1913 – 91) U.S. economist and journalist

Indian Currency

Indian currency is Rupees & paisa.

Bank Notes

The contemporary Indian notes are Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1000. These notes show the portrait of Mahatma Gandhi on the face & hence are called as Mahatma Gandhi series. They have been in circulation since 1996. Notes have two sides. the side which has the face of Mahatma Gandhi is called as Obverse and the other side is called as Reverse.

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Size - 117mm X 63mm

Size - 137mm X 63mm

Size - 147mm X 63mm

Size - 147mm X 73mm

Size - 157mm X 73mm

Size - 167mm X 73mm

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Size - 177mm X 73mm

These notes are issued by the Reserve Bank of India. Look at the note carefully & check out the following:

1: Reserve Bank of India is the organization that issues notes 2: National Emblem- Sarnath Pillar 3: RBI Governor Signature 4: Mahatma Gandhi’s face 5: Promise clause is the promise to pay bearer the amount mentioned on the note.

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2

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It is difficult to copy these notes as they have many features which prevent counterfeit. For example; the portrait of Mahatma Gandhi, Reserve Bank Seal, guarantee and promise clause, Ashoka Pillar, RBI Governor signature are in intaglio i.e. the raised prints which can be felt by touch. This security feature is not in Rs 10 note.

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Banknotes contain the Mahatma Gandhi watermark with a light and shade effect and multi-directional lines in the watermark window. For more details you can check out: http://www.rbi.org.in/Scripts/ic_banknotessecurity.aspx

Contemporary Currency notes have 15 languages on the panel which appear on the reverse of the note.

The Ashoka Pillar at Sarnath is the most popular of the relics left by Ashoka. Made of sandstone, this pillar records the visit of the emperor to Sarnath in the 3rd century BC. Sarnath is the deer park where Gautam Buddha first taught the Dharma. Sarnath is located 13 kilometres north-east of Varanasi in Uttar Pradesh, India.

It has a four-lion capital (four lions standing back to back) which was adopted as the emblem of the modern Indian republic on 26th January 1950. The motto “Satyameva Jayate” स配यमेव जयते (Truth Alone Triumphs) is inscribed below the abacus in Devanagari script. The emblem forms a part of the official letterhead of the Government of India and appears on all Indian currencies as well. The wheel "Ashoka Chakra" from its base has been placed onto the center of our flag.

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Coins

Coins in India are presently being issued in denominations of 10 paisa, 20 paisa, 25 paisa, 50 paisa, one rupee, two rupees and five rupees(Kirti, 10 rupees coins are also available now). Coins up to 50 paisa are called 'small coins' and coins of Rupee one and above are called 'Rupee Coins'.

Metal : Cupro- Metal : Cupro-Nickel Nickel Weight : 6 gm Weight : 9 gm Metal : Ferratic Diameter : 26 mm Stainless Steel Diameter : 23 mm Shape : 11 sided Shape : Circular Weight : 4.85 gm Diameter : 25 mm Shape : Circular

Metal : Metal: Ferratic Stainless Steel Ferratic Stainless Metal: Ferratic Weight : 2.83 gm Stainless Steel Steel Diameter : 19 mm Weight : 2.0 gm Weight : 3.79 gm Shape : Circular Diameter : 22 mm Diameter : 16 mm Shape : Circular Shape : Circular

The Government of India has the sole right to mint coins. The designing and minting of coins in various denominations is also the responsibility of the Government of India. Coins are minted at the four India Government Mints - at Mumbai, Alipore(Kolkata), Saifabad(Hyderabad), Cherlapally (Hyderabad) and NOIDA

The coins and rupees have changed to keep up with the times. Before Independence, Indian notes had the effigy of King George VI. Just prior to independence, it was replaced by our national emblem, the Sarnath pillar

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The Sanskrit word rupyakam (셂ꥍयकम)् means coin of silver. The word Rupiya was coined by Sher Shah Suri during his brief rule of India between (1540-1545 A.D.). It was a silver coin weighing 178 grains(11.534 grams)

Figure 1: One rupee coin introduced by Sher Shah Suri

Currencies of the world

A currency includes "paper" banknotes and metal coins. Each country generally issues its own currency. Different countries of the world have different currencies.. –Kirti: have you changed the font purposely?

Each currency has a main currency unit :for example: the Rupee in India, U.S Dollar and 1 a fractional currency, often valued at ⁄100 of the main currency: Ex: 100 paisa = 1 Rupee or 100 cents = 1 dollar.

Kirti: always avoid using short forms while writing articles etc.

Major currencies of the world:

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1 USD = Rs 49.66350 Rs

USA

Dollar

1 Pound = 68.88526 Rs

Britain/United Kingdom(U.K) Pound Japan

1 Japanese Yen = 0.56081 Rs Yen The Euro is the official currency of 16 out of 27 member states of the European Union (EU). These states are: Austria, Belgium, Cyprus, Finland, France, 1 Euro = 64.27287 Rs Germany, Greece, Ireland, Italy,

Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

Currently, there are 182 official currencies. Just as people and businesses buy and sell things, countries also need to buy and sell things. An import is any good brought into one country from another country. For Example: India imports crude oil, machinery, fertilizer, chemicals.

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India exports textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures.

How would different countries pay each other? Usually countries use Dollar for buying and selling. It works like a world currency. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold etc. For example: Barrel of oil is $50 and 1 gm of gold is around 2500 Rs. Since World War II gold is used as a global currency.

Rupee is not only the currency of India. Currency of Mauritius, Nepal, Pakistan, Seychelles and Sri Lanka is also called Rupee.

1 NPR = 0.6351 INR 1 PKR = 0.6202 INR

1 MUR = 1.4892 INR 1 SCR = 2.9216 INR

1 LKR = 0.4306 INR

Dollar can be Australian Dollar, Liberian Dollar, Malaysian Dollar, US Dollar and Singapore Dollar

The standard way of naming the currency is: two-letter abbreviations of country and append the first letter of the currency name. For example: USD for the United States Dollar, INR for Indian Rupees.

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The two letter abbreviations of a country are defined in ISO 3166 (Codes for the Representation of Names of Countries). The standard which defines the currencies is called ISO 4217 (Codes for the Representation of Currencies and Funds)

To find about different currencies you can refer to: http://gchart.com/currency.php

To convert one currency to another you can try: http://finance.yahoo.com/currency-converter

Numismatics is the scientific study of money and its history in all its varied forms.

Notaphily is the study of paper money or banknotes.

Indian mythology & money

In Indian mythology, two Gods are associated with money. One is Goddess Lakshmi and the other is God Kuber. It is a misconception that Lakshmi is the Goddess of wealth. She is actually the goddess of fortune. As fortune is usually associated with wealth, she has come to be associated with wealth.

Lakshmi

According to the puranas, Goddess Lakshmi was incarnated as the daughter of the sage Bhrigu and his wife Khyati. She was later born out of Ksheer Sagar (ocean of milk) while being churned. Lakshmi is the divine consort of Lord Vishnu and provides him with wealth for the maintenance and preservation of the creation. As the consort of Vishnu, she is born as his spouse whenever he incarnates.

When Vishnu appeared as Vamana, she appeared as Padma or Kamla, when Vishnu incarnated as Parasurama she appeared as Dharnai, when Vishnu incarnated as Rama she appeared as Sita, when Vishnu incarnated as Krishna, she appeared as Rukmini.

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She is as inseparable from Vishnu as speech from meaning or knowledge from intellect, or good deeds from righteousness.

Kuber

In Indian mythology, Kuber is the God of wealth and is known as Dhanpati. He is also the king of Yaksha’s, the guardians of Earth. Kuber is also the son of Sage Vishrava and in this respect, he is also the elder brother of Ravana. Kuber is not an important deity and his images are very rarely seen, though he is frequently referred to in the epics.

Vishnu had to get married again to Lakshmi who had been banished to earth by a curse in a complicated story. Since Lakshmi, the Good Fortune had been away in exile for a while, Vishnu was broke. Vishnu had to borrow money from Kubera to meet the marriage expenses and had entered into a bond to pay interest on the loan till the crack of Doomsday! At the famous Tirupati Balaji temple in India, pilgrims are assured that their donations go to working off the Lord's loan.

Word Builder Money: anything a group of people exchange for goods & services.

Match the name of currency with country Currency Country Dollars England Pound Japan Real Europe Peso United States Euro Brazil Yen Mexico

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