You may think you know what money is, but do you really? Before infinite banking, we couldn’t tell you what the definition of money was. We knew we liked it and needed it to survive, but what is money?
Money is a means of exchange. Simply put, if you buy bread for $2, you give the cashier $2, and you get bread. Hence bread is money and money is bread.
As our mentor, Ray Poteet, states, “We do things with money that we wouldn’t do with things money buys.” For instance, would you put bread in the freezer and wait 30 years to eat it? No way! Yet we put our money in banks, bonds, and policies and wait 30 years to use it. It really doesn’t make much sense when you think of it like that, does it?
Ridding Ourselves of Old Money Habits
Why do we allow our money to sit and not keep it in constant motion? The honest answer is that we’ve been programmed to believe that’s the best way to handle money. The banks have told us that the safest place to store our money is with them. “It’ll be ready for you when you need it,” they say.
Even our employers are in on the game: “We have a great retirement plan, and we match your contributions.” At the end of the day, it’s all just a ploy to get you to park your money so the banks can loan it back to you and others with interest, just as discussed in a previous blog (link to blog).
A Means of Exchange
Many years ago, before money was an idea, people exchanged good for goods in a barter system. If you had three chickens and needed a goat, you needed to find someone who had a goat and needed three chickens.
Over time, precious metals, such as silver and gold, started to replace the barter system. Later, paper money was introduced. Given that paper is worth very little, the governments had to step in and guarantee the worth of that paper with silver and gold. Since governments now control the value of money, the more that’s printed, the lower the value becomes.
That’s the definition of inflation. What cost $.05 in the 1940s costs $.50 in 2018. The price has increased because the value of the dollar has decreased.
Knowledge Is Power
Financial literacy is crucial to your financial success. At Wealth Nation, we take pride in educating our clients—and the public at large—about money and the system in which we live. As an individual, you need to educate yourself so you have the whole picture. You need to understand what money is and keep the “means of exchange” definition in your mind so that you can keep your money in motion.
Contact us today to get in on the conversation through a free consultation. We’ll help you start to see what money is in a different way.