The trading culture has permeated a large portion of the childhood of many millenials. There were trading card games, such as in Yu Gi Oh!, Pokemon, and Monsters. There were also action figures, stamps, and pins, such as baseball and softball trading pins. Recently, there have been games in which gifts and upgrades are traded online.
For many people, the barter system is a little strange and ineffective. Trading a single cow for 5 chickens? How are you sure you’re getting the right value for your products? That’s why money exists! Well, most children don’t have that luxury, so they have a little taste of the economic world starting with a little barter system of collectibles. Here are two things you probably learned while indulging in the activity:
You learned the concept of Intrinsic Value
In the world of finance, many investors, financial analysts, and economists have to learn what intrinsic value is. Basically, it’s what an object is truly worth based on an educated perception of all its assets and liabilities. The value may or may not be the same as its price.
This is easy to grasp. In the field of softball trading pins, the rule is generally that more successful teams have more valuable pins. Perhaps a corollary to this is that pins of specific years where their best plays happened are much more valuable. Then, you remember the law of supply and demand. Pins that are common aren’t as valuable as those that are rare.
You buy a set of stock pins at a certain price. Then you trade it around. You now have pins which were bought at specific prices but whose intrinsic values may be different. How did you estimate intrinsic value? The answer’s simple – through education and research. You read up on the various teams, their successes and failures, and the pins that represent these. You have experiences of seeing certain pins often. You were taught which secondary pins were worth more than others. You trade according to how valuable you think these pins are.
You learned how to haggle
Haggling is quite a common system in markets without fixed prices. Some people find it hard to adapt to doing these, while others are just natural at it. In a trading culture, you probably won’t survive very long if you don’t haggle. Plus, the temptation to actually do so is too strong to ignore!
Remember that time that you had a bunch of softball trading pins you weren’t really interested in keeping, but you had your eye on another one? And it just so happened that the person who owned that piece also was not interested in any of your pins? So you started haggling. First you offer a one-on-one trade. Then you move on to two for one. And you keep raising the bait until either the other person bites or you feel the value is too high.
On the other hand, there may have been instances when you were offered a trade that you think was too high, like a single regular pin in exchange for your pin with spinners. So, again, you haggle. You ask the other person to increase his or her stakes so that you could both end up in a win-win situation.
Being financially aware has always been considered as an adult thing. Most grown-ups don’t believe that children have the capacity to make such decisions, or they think that children will surely make devastating choices. Well, one of the only effective ways to learn is to actually practice! The trading culture, such as in the use of softball trading pins, is a fun and safe stepping stone for children before entering the aggressive world of monetary economics.