Money Blog

Let’s be honest, money is important.

While it might be true that money can’t buy happiness, it’s also true that a lack of money can cause you stress and hardship. Money is important to your life. Money is important to everyone’s life. The people who say money isn’t important say that because they have money.

But what is money?

When you really get down to the brass tacks, what is money? It’s simply a way to exchange goods and services without barter. That’s what money is, and that’s what it is used for. If you are a plumber it’s much easier for me to pay you a few hundred dollars to fix a plumbing problem than it is for me to find a plumber who happens to need data analysis services.

Money, at the end of the day is a mirror. Now you can get that reflection to look good in dishonest ways. But you’ll know it, and everyone else knows it. But when you work honestly and you get paid, it doesn’t matter what the job is you earned it. This is your money.

Money must be protected.

For money to work it has to have what is called a store of value. That means that if you have one hundred dollars, it needs to purchase one hundred dollars worth of goods a year from now, just like it does today. When that isn’t true and it can purchase less goods we have inflation. Any time a government allows inflation it is stealing money and more importantly time for its citizens.

If you work ten hours this week for ten dollars per hour you have one hundred dollars worth of purchasing power. You can use that one hundred dollars to buy food clothes and housing. But if you save that money for one year and it only buys $90 worth of products inflation has cost you one hour of your time. And that cost is multiplied by every 100 hours you worked.

But it works against the banks as well. When banks lend you $100 for ten years they know that inflation is going to take some of that money. So for them to make a profit and stay in business they not only have to charge enough money to make the profit and cover costs, they also have to factor in the loss in money due to inflation.

Money is important and everyone should understand how it works.