Экзамен 3 курс / Money

Money

Money makes the world go round. Money is the essential part of our life. From day to day we use them, earn them and love them. Each person wants to get the best return on investments. There are many ways to benefit from your existing capital. Some of them are very risky, others less risky. The safest method to make an investment is to buy something that can’t decrease in value suddenly. It could be gold, precious stones, antiques and paintings, property or you may just place your money in a high-interest deposit account. But it is necessary to bear in mind that such investments are not a way to become rich quickly. The only way to become rich in a short period of time is speculation. To speculate means to buy and sell goods or stocks and shares in the hope of making a profit through changes in their value, but with the risk of losing money. So, if you a gambler you may buy for example currency and due to fluctuations in the currency market become rich or poor. But before that, you should know that there are a lot of examples of notorious speculations. The first one is The South Sea Bubble. The South Sea Bubble is the name given to a speculation in 1720, and associated with the South Sea Company in London. People bought shares in the company expecting to make huge profit, but the boom in shares collapsed and many investors lost all their money. Another interesting example of such notorious speculations is so called Tulipomania. In Holland in the beginning of the 17^th century was happened one of the first and most extraordinary speculative explosions in the history. It was not in stocks and shares, in real estate or in fine paintings, as you might expect, but in tulip bulbs. People from all classes invested in the bulbs. Many sold their property so that they could pay for the bulbs they had bought in the tulip market. Then the boom in the market ended. No one knows why, but people began to sell. Others followed suit. Soon there was a panic among investors and the tulip market collapsed. In the result many people went bankrupt. The Wall Street Crash is also a good example. The stock market crash in the USA was huge and it led to a severe and lasting economic crisis in the world. At first share prices on the New York stock exchange rocketed to unbelievable levels. Then all ended. Share price fell dramatically and kept on falling. The boom was over. Many bankers and industrialists lost their money and reputations. So, the speculation is very dangerous. That’s why many people invest their money in something more stable in comparison to speculation. At the present time the most common way to increase capital is investments into the own business. Sometimes people don’t have enough money to develop their businesses and they need a loan. As a rule it is not easy to get a loan because there are a lot of factors that bank executive should consider before giving a loan. First of all the bank executive is finds out what clients know about the bank and lending rates. It is good when clients know what they want and can demonstrate an understanding of the bank requirements, and it’s far more impressive when clients explain with clarity the purpose for which the money is required. Secondly it is very essential for the bank executive to see that his clients are confident, not brash, but just confident it means that they are well prepared. Thirdly it is extremely important for the bank to realize fully that business have all necessary means for repaying the money that it’s borrowed. A quality business plan should be capable of demonstrating this. A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization. A business plan is often the entry-level requirement to getting government money, investor capital or bank loans. You may have a complete picture of the business in your head, but investors and bankers need to see if you really have an understanding of the business and have realistic possibilities to develop it. In order to gain money the business plan should include the details of the business structure as well as financial information. The start-ups and small companies also need a good product presentation to obtain the capital. The key points for product presentations are: The Business, The product or Service, Marketing, Finance. (p 76 market leader)