Wednesday Musings: Money. Just, What Exactly, Is It?
Let’s face it.
We don’t talk enough about money and therefore it is so difficult for any of us to identify what Money is, what it does and what it should be.
Agree?
We need an honest assessment of the knowledge we have pertaining to money. Tracing back to our collective limited knowledge on this topic, we know there are criteria that define what role Money should perform. These attributes are covered in every single Economics 101 textbooks that we read in college.
They are: -
- Unit of Account — You can count them.
- Fungible — Meaning the $10 bill I have, spends just as well as the $10 bill in your pocket.
- Store of Value — They maintain your purchasing power.
- Medium of Exchange — Buying and Selling can be performed via the acceptance of money.
If we take a pause and reflect on the above, we can see that something is still deeply amiss.
They tell us what Money should do, not what it is. And because of that, as we stand today, we have various forms of Money. Gold and Silver is Money, Cash is Money, Foreign Currency is Money, Cryptocurrencies are Money.
The important thing is to note that the forms and characteristics aren’t key. The key is whether we can buy using these and are we willing to accept these forms of payment when we sell our goods and services?
Instead of thinking deeply over what Money is, too many of us went too far into the other end of the spectrum.
We associate our feelings and values to Money.
I know one conventional saying that will inevitably pop into our heads when we try to think about Money.
“Money is the root of all evil”.
I am sure you must have heard about this many, many times.
Do you accept it?
Personally, I don’t.
There are 2 concepts in that saying — Money and Evil.
That saying says absolutely nothing about Money. It does say a hell lot about evil. When I reflect from that angle, I think. What is that person trying to tell me? To not be evil? Or to be wise in my use of Money?
This, of course, is up to us to mull over.
Money is a tool and true wealth is not measured in terms of the digits appearing on our bank account.
True wealth, needs to be measured in terms of time and freedom. Money, is an expression of that.
If having Money allows us to spend our time and freedom on things that matter and not having people breathing down their necks, then the pile of Money is worth millions.
That is one perspective that I endorse.
Why?
That is because time and freedom are the ultimate goals.
Money is a way to get there.
It is not the destination. It is a vehicle.
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About the Author:
As a finance and thinking enthusiast, I believe in making the complex simple.
Because simplicity adds value.
Simplicity helps us gain clarity, and clarity helps us to grow.
And if we are not growing, then what’s the point of anything else?
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