Thursday, October 4, 2012

Money Talk and Insurance Speak (In the “interest” of learning where the terms came from)

images of various US dollars    
The word “interest” came from the Anglo-French term interesse used during the late 14th century, which translates to “what one has a legal concern in.” The term in turn came from the Middle Latin word interesse” that is equivalent to “compensation for loss.” In the mid-15th century, the word was used to mean, “concern,” “advantage,” “benefit” and even “legal right or claim.” Later, in the financial sense it became the term to define “the money that is paid for the use of the money that was lent.”

So in the “interest” of knowing where these common present-day money, banking and finance terms originated, let us trace their history of origin, since some of them may sound Greek, er, Latin, I mean, to you.

The language of finance and insurance is filled with many terms that may sound intimidating to some, while it translates to dollars and cents to others. What is interesting to note is that many of these terms and words used often have quite a unique etymology.

While you may not necessarily be an ace when it comes to money management, at least it pays to know about the origin of many of the words we encounter when it comes to money.
Bartering at the local market, Pátzcuaro, Michoacán, México    
According to the book “The History of Money” written by Glyn Davies, the origin of money was actually non-economic. It came about because of the tributes, trade, bride-money, blood-money, barter, religious and ceremonial rites and lavish, grandiose and flamboyant ornamentations.

In ancient times, people were not used to paper money as we are today. One of the methods of exchange was barter. There were items that were preferred more than others. These include precious stones like amber, ivory, beads including wampum, jade and quartz, shells such as cowries, drums, leather, rice and salt, animals such as pigs and cattle, decorated axes called zappozats, mats, yarns, umiacs and even vodka. Tributes, compensation for crimes, loss of a daughter through marriage, taxes, and religious obligations forced people to “pay,” which is a word taken from the Latin word pacare which translates to “appease,” “pacify,” or to “make peace with.”

In the Fijian society, whale teeth or tambua are used as bride-money and for other ceremonies. The word “taboo” was derived from that term, since it had religious relevance.  Cattle were a very favored form of payment in ancient times. The word “cattle” comes from the Old French word catel, which in turn came from the Latin word caput meaning “movable personal property.” So from the word cattle we got the new words “chattel” and “capital.” The word “fee” on the other hand came from the Old French word fief and fieu that meant holding, domain or possession. Other words again stemmed from the term cattle, such as “peculiar” from the 15th century Latin word for the animal, pecus, and its relative, peculium, which literally means “property in cattle, since the bovine was a highly valuable property and a very prized possession during those times.  “Peculiar” is also derived from the word peculiaris, which means “of one’s own property.”

Indeed, owning cattle during the ancient times made a person rich. Livestock ownership during those times is the way to measure the wealth of an individual or a family. The word truly inspired some of the financial words we know today. The word “pecuniary” is from the Latin term pecuniarius, which literally translates to “pertaining to money” and the word pecunia, which pertains to wealth, money or property. Again, the root word is pecu, meaning flock or cattle. There is still some relation between wealth and cattle today, since cattle is still highly prized, for their meat and their hide and there are numerous cattle barons and cattle and beef producing countries in the world, including the United States, India, Argentina, Brazil, Australia, China, Colombia, Mexico and Russia.

Of course, when you have money you are somehow compelled to spend. The word “spend” stemmed from the term, “expend,” which came from early 15th century Latin word expendere, meaning to “weigh out money” or to “pay out.” It is a compound word composed of ex meaning “out” and pendere meaning “to weight, pay.” “Spend” as a term is also related to the Old English word forspendan or “use up,” which also originated from the Latin expendere

Let us expand our knowledge about terms related to money and finance, with some of the more common words we use or encounter today.

The word finance is a fine word indeed! In its simplest form, finance deals with the management of money. It originated in Latin, which produced the French word finaunce and the Middle English term finance or finis, which means “the end.”

In the 14th century, the Latin word finis referred to making something perfect or producing something of the highest quality. Therefore, when it comes to money matters, it has a positive connotation as it means “to settle (a money) matter” or “to make something fine”.

In the 15th century, the French used the word to mean, “settling a debt.”  In the 16th century, the term “fine” began to be used as a form of penalty, which is why the term started getting a negative connotation. Incidentally, the Middle English term is also the root of the word “fine.”

Money may make the world go round, but the term originated in Rome during ancient times.

Temple of Hera/Junon
It is believed to have come from the temple of Hera, which could be found in one of the Seven Hills of Rome, specifically, on Capitoline. It was here where Ancient Romans kept all their gold, silver and bronze coins. This was the ancient version of the Roman Mint.

The Romans built the Juno Moneta in 344 BC as a temple to Hera. Juno Moneta literally translates to “Juno who warns.”

The Romans gave her this name because when the Gauls tried to invade the Romans in 390 BC, it is said that a flock of geese alerted the Romans to the impeding attack. The Romans were successful in defending the temple and all the coins in it, thanks to the early warning believed to have come from the goddess Juno. Thus, Hera became “Juno who protects funds.”

Juno is from Uni, the Etruscan goddess, which means “one” or “unique,” “unit” and “united.” At the same time, Moneta is from the Latin word monere, which means, “to instruct.” For the Greeks, it is the word moneros, which translates to “unique.” It is from monere or Juno Moneta that the word money evolved from, as well as the words “monetary” and “mint.”

Everyone loves to have cold, hard cash, but this favorite word for money is of Latin origin. It is from the word capsa, which means “chest” or “box,” pertaining to the container that the money was placed in.

An early silver kasu of Uttama Chola (973 - 985) Thanjavur in TamilNadu.
The term cash is from a number of sources. In Middle French, it is from the word casse, meaning “money box.”  It is also of Old Italian origin, from the word cassa. After the 18th century, the term was used to refer to the actual money inside the box that it was contained in.

It is also believed to be from the Tamil word kasu, which translates to “coin.” This is a term encountered by the East India Company, which is probably how it found its way into the English language.

If you don’t have a lot of cash, then the next best thing is credit. Credit evolved from the Latin word credo, which translates to “I believe you” or “to entrust.” After all, borrowing money is all about trust and believing that the other person will pay you back. The Italian word credito, which means, “balance” is another origin of the word.

To debit money means to withdraw money from the account. It is also from Latin, from the word debitum, meaning, “something owed.”

If you don’t have enough cash and you’ve overextended your credit line, then you may find yourself in debt. The word “debt” in Italian is debito, which is the root word for the word debit.

When you deal with money, you will inevitably deal with a bank. Latin is the root of many European languages, such as French, Italian and German, which is why the same word would have variations in the different languages. In Old High German, bank is from banc, meaning “counter,” while for the French, it evolved from the term banque.

Bank is from the Italian word banca, which means bench. This is because as business and commerce thrived in Italy during the Renaissance period, the Jewish merchants in Lombardy used benches as counters or desks in the marketplace as they exchanged money. These tables were covered with a green tablecloth.

No one wants to go bankrupt since it signifies financial ruin. This term is from the two Italian words banco, which means bench and rotto, which means broken. This is because in the olden times, when the Jewish merchants in Italy ran out of money and failed, the bench they used would literally be broken in half by the people in the marketplace.

If you don’t want to lose all your money because of an accident, sickness of other disaster, then you’ll want to get insurance.

Insurance is what people get to protect against a loss since with the act of paying a premium, you get the assurance from a contract that someone else will cover your losses from risks such as death, damage or ill health. This is why we have various kinds of insurance, be it life, home, automobile or health insurance.

The practice of spreading the risk dates back to the Babylonians. It was likewise practiced by Phoenicians and Greeks. However, insurance as we know it today is from the medieval guilds of Europe.

Insurance is rooted in the word insure, which in Middle English was an alteration of the word assuren. It’s funny that during the 16th century, the word meant as an “engagement to marry.” Talk about insuring that someone would be taking care of you.

In the insurance industry, an underwriter or the underwriting department is tasked with ensuring that the insurance policy is written correctly and that the proper risk is assumed by the company.

The term underwriter has a literal origin, much like bankrupt. The term underwriter evolved from the practice in the 17th and 18th century of spreading their risk. Marine merchants would come together and write on a board a policy that would cover losses as well as profits for a specific trip. Those who wanted to be included on the business venture would literally write their name underneath the contract posted. Everyone’s name listed under the contract would then be able to share in the profits, or help assume part of the loss. Hence, the term underwriting.

These are just some of the interesting etymology of various words and terms when it comes to money matters. So now, even if you may not necessarily be the best when it comes to handling money or a millionaire, you at least have the knowledge of where these terms came from, and you can take that to the bank!

Photo Credits (Wikimedia Commons)
-       Temple of Hera/Junon
-       Silver Kasu


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