What is Money?

Money comes in many different forms; whether it be printed paper in the form of a fiat currency or 1’s and 0’s in a computer system. Then we have materials which posses intrinsic value, such as commodities in the form of gold, silver and platinum – these things have value because of their relative scarcity and ornamental beauty.

“In finance, intrinsic value refers to the value of a company, stock, currency or product determined through fundamental analysis without reference to its market value. It is also frequently called fundamental value”

Money is also used for many different things, from purchasing your morning coffee on the commute to work to acting as a tool of exchange on the black markets. As can be seen from my example, money can be used for bad and for good in equal measures. That fact, however, does not make money intrinsically good or bad in itself. Money is just a tool; a medium through which exterior forces act.

Ultimately, money is nothing more than a conceptual system – an idea – a perception of value relating to some element of physical matter (be that paper in the form of pound notes, or solid gold bars). Intrinsically, a ten pound note is worth nothing more than the paper (or more recently plastic) it is printed on – it’s the idea, or perceived value behind it that gives it the value that individuals, societies and countries are willing to exchange upon.

For example, printed money (otherwise known as IOU’s or fiat currency) used to be based on the gold standard. This meant that it’s value was backed by a quantity of gold held by the issuer of the printed money, to the same value as that of the printed money in circulation at any given time. Prior to that, our currencies were in the form of coins forged from precious metals that had a high perceived intrinsic value. We exchanged that actually material we considered to have intrinsic value, rather than a promissory note. The Bank Charter Act of 1844 marked the establishment of the gold standard in the UK, but our currencies are no longer backed by the equivalent value in precious metal holdings and so they are no longer backed by the gold standard. Instead, the value of a country’s currency is now based on the perceived value of it’s economy, which in turn is based on the overall financial performance of the country and it’s components as a whole. This is partly why currency exchange rates can be so volatile in times of uncertainty, or economic downturn.

Essentially, the point I’m trying to make is that money is nothing more than an idea or concept created within a human mind, with a physical system built around it. Thus, the concept is open to interpretation as a result of the differing perceptions and different viewpoints from which different people approach the concept. The result is the potential for increased dynamic leverage, with multiple approaches to deliver results in your favour – so long as you know the rules of engagement, and you understand what it is you are dealing with.

I used to be one of those people who thought that money was the scourge of the Earth; the most vile and evil instrument man ever created. The more educated I have become on what money truly is, and the potential is has as a tool to be leveraged, the more I have realised my prior assessment to be incorrect. It’s very easy to blame others or outside factors for our faults, or for things that don’t go our way in life, but ultimately we can only solve the problems and challenges we face in life when we look within. What about myself can I improve upon to help improve this situation? How can I change my outlook or my actions to produce a more positive result? These are excellent questions, and ones we are all guilty of not asking ourselves often enough.

Money is a tool; it gives us leverage, and the potential to move mountains, and that is very exciting for us as a race. Allow me to reframe; we have found a way to leverage the entirety of the human race towards a focused outcome.

“Money talks, bullshit walks”

When you see it for what it is, or rather what it has the potential to achieve, the concept of money actually becomes very exciting. Money is how we trade, it is a system we have built for ourselves that is recognised and leveraged Worldwide. Every person known to the global grid relies upon money in one form or another as a trading commodity to exchange various different goods and services. It’s the focus of direction we are lacking – we already have the perfect infrastructure to effect huge positive changes in the World, all we need is the collective focus of our species as a whole. This has never before been more possible than today – we are more connected now than we have ever been in recorded history, and we have information, quite literally, at our fingertips. We are the Gods of our time, commanding an understanding of the laws of our Universe and relative control of our immediate environment to an extent not previously realised. As our knowledge increases exponentially with time, so does our potential as a species.

Reality check.

The problem with money is how misunderstood it is, and how we misguidedly try to blame it for the wrong doing of the person doing wrong with it when it is not eligible as something to be blamed. It is inanimate. It is what we made it to be; for this we must surely take full responsibility! The simple fact is, we are misusing the system we created – we must strive to use it more wisely. There is a very good reason why most of the wealth in the World belongs to less than 0.1% of the global population; the variance in the level of financial literacy between people. You see, it’s not that the World is set up in favour of the rich, so much that the rich know the rules of the game, and therefore play it impeccably well. Think about it; if you’d never heard of Monopoly before, and then attempted to play against a seasoned pro, I’d lay money on you not faring very well and eventually suffering substantial losses to the more experienced player. In a lot of ways, games such as these serve to teach very important lessons about life, and how the World works. Unfortunately, our children don’t learn anything about financial literacy in school past how to add, divide and subtract (I’m of course exaggerating, but I hope you get my point – I would have been much better off learning about interest rates, investment portfolios and how to manage my household finances than learning pythagorus theorem which I have never used since!) and and thrust out into the World to ‘figure it out for themselves’. Hardly the best way to set our younger generations of leaders up for success.

Money is a powerful to leverage to get results in your life, whatever your goals may be. It is imperative that you strive to increase your financial IQ in order to better understand how you can leverage money to your advantage (and believe me, the ways are many), and how the economic and financial systems of the World work. You have unlimited access to all this information via your smartphone or iPad, so ignorance is no longer an excuse – it’s a choice. If you’re pissed off about so few people having so much of the money, whilst you’re left with pittance then get up off your arse and do something about it; learning the rules of the game is a great place to start.

These tricks of the trade, tax benefits and loopholes are available to everyone for the most part – the problem is that most people either don’t even know they exist, or have no idea how to find out, or don’t even think it’s possible for them to benefit from them. All you need to do is learn the rules of the game, because that’s all this is – from life, to your job, your social experiences and financial systems – it’s all just a game.

Learn to play the game – in a time when we are so connected, with limitless information at our fingertips, there is no excuse to not know the rules. The potential for greatness lies within all of us, and our level of success in life is determined by how much we strive to learn and improve daily and by how much action we take in our lives. Take action now!

“The world is like a ride in an amusement park, and when you choose to go on it you think it’s real because that’s how powerful our minds are. The ride goes up and down, around and around, it has thrills and chills, and it’s very brightly coloured, and it’s very loud, and it’s fun for a while. Many people have been on the ride a long time, and they begin to wonder, “Hey, is this real, or is this just a ride?” And other people have remembered, and they come back to us and say, “Hey, don’t worry; don’t be afraid, ever, because this is just a ride.” And we … kill those people. “Shut him up! I’ve got a lot invested in this ride, shut him up! Look at my furrows of worry, look at my big bank account, and my family. This has to be real.” It’s just a ride. But we always kill the good guys who try and tell us that, you ever notice that? And let the demons run amok … But it doesn’t matter, because it’s just a ride. And we can change it any time we want. It’s only a choice. No effort, no work, no job, no savings of money. Just a simple choice, right now, between fear and love. The eyes of fear want you to put bigger locks on your doors, buy guns, close yourself off. The eyes of love instead see all of us as one. Here’s what we can do to change the world, right now, to a better ride. Take all that money we spend on weapons and defences each year and instead spend it feeding and clothing and educating the poor of the world, which it would pay for many times over, not one human being excluded, and we could explore space, together, both inner and outer, forever, in peace.”

– Bill Hicks

 

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