image by kevindooley
What is money anyway?
Money in it’s essence is a promise between people. It’s a promise that that little piece of paper or that coin represents value, is worth far more than the paper or the metal it is made of.
It’s a trade mechanism that enables an exchange of value between people in such a way that value creation and value consumption can be (far) apart in time. You earn money whenever you create value, and you can consume value when spending that money.
Over time that system of promises has grown into a worldwide monetary system with lots of different currencies. In the essence though, it’s still a promise between people that enables asynchronous exchange of value.
Asynchronous creation and consumption
Money has enabled the act of saving too. In the old days it was useless to save up promises between people. The exchange of value could be asynchronous, but not very much apart in time. Money has helped us to bridge that last gap.
Money enables us to extend promises over longer periods of time. We can keep money for 30 years and it’ll still be valuable. Inflation devalues it over time, but not quite as much as a regular promise made 30 years ago by someone you haven’t talked to ever since!
And so the money itself has become an object of desire. People want money, and many goals are set about earning money, owning money, and being wealthy. And it’s also very easy to turn into a SMART goal. It’s easy to specify exactly how much you want, at what point in time, and it’s highly measurable. All the traits of a goal that could work (and often does for people).
But a lot of people forget that the money in essence is a promise. The money by itself is fairly pointless, it is what it represents that holds the promise of value.
Money as a core value
When people define their core values, it’s not uncommon for money to appear somewhere in the process. Most of the exercises I created in my e-book are designed to avoid that pitfall. But when people out of the blue start defining personal core values, or life goals, or personal mission statements, money often appears in them.
But money is only a representation of something else, just like it is in the monetary system. When it comes to values, the question to ask is: “What does having lots of money bring me?”. And the answer cannot be physical, you have to get to the meaning behind the desire.
It might bring you a sense of security, which might indicate that security or peace of mind is a core value for you.
Or it might give you the feeling of being successful, and the underlying core value might be success. The money may also be simply a measure of growing (with growth the underlying value), or of overcoming obstacles (with the underlying value of challenge or adventure). Or it’s the status that comes with having lots of money that’s important for you.
What does money represent for you?
Either way, the money represents something. Knowing what it represents is important, because it enables you to identify other ways of achieving progress on your underlying core value. Money is not the only way you can achieve progress on that value.
What does having money mean to you?
{ 12 comments… read them below or add one }
I think Warren Buffett says it best here… “Price is what you pay, value is what you get”. Money is only one means for me to exchange something, but it’s the value of that “something” that’s important to me.
That’s step 1. Step 2: What does the value of that “something” mean for you? If “money = a car” for instance, then what does that car mean for you? This post is about moving away from the material, towards the underlying core values that drive you to own stuff.
But taking step 1 is major, a lot of people never even get beyond that point!
Your point is wery well explained and very inspiring.
Thanks, but considering the comments, I believe I could’ve done a better job explaining
I believe that money is a vehicle to achieve most our wants. In the end however, what we aspire with money can never give us satisfaction. Money nowadays has become an end, not the means.
I agree that it’s a vehicle, Walter. A means, not an end like you say. But what if you took it even a step further? What are the underlying core values that you satisfy by having money, or by owning stuff? And isn’t there another way to (at least partially) satisfy them?
The site is looking good!
A friend of mine who grew up impoverished and worked hard to become successful – and did – put it this way: “I want to be able to eat all the ice cream I want”.
I see money as a way to enjoy some of the things in life I like having access to. A lovely vacation in the tropics, great organic foods, shelter that I enjoy, and being able to help others.
Money is fine, I feel, yet GREED is frightening. I don’t mean a little greed, I have that at times. Please save that last bite of food on the plate for ME!
. I mean the kind of greed that people sell their souls for! That is scary.
I have seen this occur in families so often – fighting over money and becoming extremely UGLY in the process. Very very sad. It demonstrates a not very lovely part of the human psyche.
Thanks, Lauren! Much appreciated!
Yeah, greed is frightening! It’s a need gone extreme, and like you state, I’ve seen it go bad in families as well. Weird how this stuff called money can get such an important place in our lives, when it’s only a placeholder for other (more important!) stuff.
“Having money removes the problems that not having money creates.” This was once said by the copywriter and marketer John Carlton, and I think this is so true. It also means that money has only the value that you put on it.
Now, when I help a client create their values hierarchy, often there is no mention of money. This is because they transcended to what having money will mean to them, as you said in your post, Lodewijk. The challenge starts when they come back and say that, although they feel for example successful, they still haven’t got the money that they want.
It is a question of what value people put on money, and then giving more value in exchange for the money.
Money, for me, is a means to an end. At least, that’s how I’d always want it to be — to use money so I can get as many of the things my family needs (take note, not wants) so we can live a comfortable enough life. However, I wouldn’t want the desire of money to rule our lives such that we spend more time making it than enjoying what it can give us, however little, sometimes.
Lodewijk posted that “This post is about moving away from the material…”. But that’s just it, money is not material. People think it is because other people think it is an will therefor give real material for money. Money at best is metal coins that have some value, at worst it is a few binary digits in some memory bank somewhere. Money is really not important except for the promises it conveys.
What is really important is the material world, the actual state of the land, air and water that we use and leave behind. (the promises we have made to each other may have some importance to future generations, but not that much, because the future generations didn’t make the promises”
– Paul Lange
Money is immoral. Why do people charge their brothers and sisters money for food, clothing, and shelter? Wake up, people, to the hurt that money causes. Sharing is the answer.