We use Money to pay our purchases, expenses and also to store our wealth.
We use Financial Instruments
to transfer resources from savers to investors, and to transfer risk to
those who are best equipped to bear it. (Examples are: Stocks,
Mortgages, and insurance policies, they're all examples of financial
The fourth part of the financial system is Financial Institutions,
and they provide plenty of services, including access to the financial
markets and collection of information about prospective borrowers to
ensure they are creditworthy (Banks, securities firms, and insurance companies all are examples of financial institutions)
The Regulatory Agencies
form the fifth part of the financial system, and they are responsible
for making sure that all the elements of the financial system (including
its instruments, markets, and institutions operate safely and reliably.
The last piece of our financial system; Central Banks
and they are responsible for monitoring and stabilizing the economy (just like the Federal Reserve System in the united states)
These six parts of the financial system perform the essential
functions, even if it had a different shape after a while; for example,
money was once silver and gold, but today it's more like Bitcoin and
Ethereum. Still, money has the same function and uses!
You cannot progress in life without financial education; if you don't
understand the system that rules money, how can you become wealthy?
You have to know that wealth is not an incident; it's a process, a long one in fact
The next articles will dive more into how our financial system works,
also we'll reveal five core principles of money and banking that are
life-changing, they will drastically change the way you look at money,
time, risk, and everything, stay with us.