Thursday, December 23, 2010

Money Make the World Turn

Free Money Collection in CashImage by epSos.de via Flickr


I am learning that a lot of self improvement is linked to the perception of money. I used to think money was not important for happiness. Personal experience has changed my opinion, I have learnt that money is a tool for defining value. In a manner of speaking it is a score card. A good life pursues lasting value. Money is a guide for value. The value isn't set by the price, value is set by the price people are willing to pay. Money is also a guide to the social value you have created.

The difference between money and value is personal. Personal value is linked to the individual, while money has social value.

Maybe you were like me and you thought the desire for money made you greedy; the desire to create wealth was selfish. You may believe the pursuit of wealth prevents you from appreciating what you have. I don't believe this is true if money is only used as a tool for exchanging value for value. In it's purest sense when you create money i.e earn money it is done by creating a service or product with something of value. Many wealthy people are careful in how they spend. Money is a tool,  it isn't an emotion or a feeling, it isn't a character flaw.

Value is Derived from Effort

Do people appreciate the value if they haven't exchanged effort for effort? How do I create or earn money? How do I create value?
effort * value = money
demand/scarcity = value
effort * (demand/scarcity) = money


If money is the reward for people who create value, should anything be free. Is it fair to ask someone to work hard to create something, and then give it away for free? If it is given away for free do people value it? When a fisherman gives something away for free, it is bait on a hook. Generally speaking free should ring alarm bells.

Easy Money
Do you want to win the lottery so you can spend all your time lounging around and be on permanent vacation? Do the goals and dreams you make depend on you and your actions? Is the dream of winning the lottery limiting you from creating your own future, your own success? If you are not working at improving your situation how can life improve?

Capitalism
The best part of capitalism is it is a natural way to do business. To trade value for value. The flaw in the system is it favours those who have wealth and power. Loans try to bridge the gap between those that don't have and those that do.

Conclusion
People associate wealth with greed. But what we want is not other peoples money, we want a good life for ourselves. See other peoples success as hope for yourself. Shouldn't people who create value be rewarded? The wealthy man spends his money and rewards other people who create value, and that is how the economy works; we hope. People who create value are rewarded and the money earned by creating value can be used to pay other people who have created value.
The problem is when wealth gives an individual a disproportionate amount of power. How can we separate wealth from power?

Related Reading
Bad Stuff Happens, Dreams Are Made [Timeless Information]

The Credit Crisis in Simple Words, Part 1 [ Cultivating the Mind ]

The Credit Crisis in Simple Words, Part 2 [ Cultivating the Mind ]

Questions about the Credit Crisis [ Cultivating the Mind ]