L1 · Starter: How Markets Work / Money Basics
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What Is Money? Why It Loses Value Over Time
A ₹10 note in your drawer never changes. So why did it buy two samosas once, and only one today?
Money is a tool to swap for things, and it slowly buys less as prices rise.
The story
Arjun is packing for a new flat. An old ₹100 note falls out of a school textbook.
Arjun: Meera, look! ₹100 from when I was in Class 8. Still crisp. Still worth ₹100!
Meera: Is it? What did ₹100 buy you back then?
Arjun: Ten cups of chai at the stall near school. Easily.
Meera: And today?
Arjun: Maybe six or seven. Wait… the note didn't change. The chai did.
Meera: Exactly. Money is just a tool everyone agrees to swap for things. It doesn't rot. But prices creep up, so each note quietly buys less.
Arjun: So my savings in the cupboard are… shrinking? Without anyone touching them?
Meera: Not the number. The shopping. That's the sneaky part.
Arjun: Then what do I do with money? Keep it, grow it, trade it?
Meera: Good question. First, watch how fast it shrinks. Then we'll talk about the three games.
What you just saw
The blue line is the number you hold. It never moves.
The gold line is what that money can buy. It slides down every year.
Money is great for swapping. It is not great for storing value for many years.
Money is a swapping tool. Left idle, it quietly buys less each year.
Practise it in the Compounding & money.