When I ask you “what is money?,” you likely have an immediate answer.
Maybe you go straight to its cultural equivalent for you – dollar, euro, pound, yuan, etc.
Or you talk about money in relation to what it can buy.
Or what you do to earn it.
But the bottom line is that your mind likely comes up with many different answers to the question – what is money?
And it’s very likely not the one that I’m going to give you.
Money is a numerical representation of value.
That’s it – It’s just a number that you assign to something that YOU value.
Let’s play a game to illustrate this point.
I’m selling you a t-shirt – it’s a nice, decent cotton t-shirt.
Now without any additional details, think of a price you’d pay for this shirt.
Now imagine that you are not only shirtless, but you don’t own any shirts. How much would you pay?
Did the price you’d pay change?
We can keep changing up the factors – you could already own several t-shirts, you could live in a place where you don’t need a t-shirt, or a place where your life depended on you having a shirt, or many other scenarios.
The amount that you’d be willing to pay for that t-shirt will vary based on the amount of value that shirt will bring you.
This sounds overly simple and that’s my point – money is incredibly simple.
Determining the value of something is NOT.
So when talking about money, what we really need to talk about is VALUE.
And there are two ways that you can assess value:
- The value YOU offer
- The value SOMEONE else pays
Money is outcome of this evaluation.
Here’s an example:
Let’s say you price your time at $150 an hour. You offer your time to someone else for $150 (they want your help).
Now the buyer of your help has to evaluate whether your time is worth paying $150 for – if it’s not, they don’t pay or they counteroffer.
At which point you will have to reevaluate your value and determine whether you’re willing to pay for the loss (you’d accept less than the amount you think you are owed).
Eventually, you either settle on a price for the value to be exchanged (you sell, buyer pays) and money is received or you both walk.
How did this arrangement come to be? Let’s take a quick look at the history of money.
What is Money? A Brief History
There was a time when currency (money) did not exist – items or services of value were traded for items/services of equal value. This seriously limited what could be exchanged because the trade depended upon two people agreeing to have different things of equal value.
When you’re limited in terms of the people and things you have access to, this kind of bartering system can make it very difficult to get your needs met and survive.
In 600 BCE, trading changed as the first official currency or money was developed.
Using minted coins, people could now trade many different things with a variety of people. They only had to agree on how many coins items where worth versus offering something of equal value.
Using coins to represent value opened up the entire world to trade. It’s an invention that’s right up there with fire and the wheel.
Because money makes it possible for people to survive.
You’d think then that the best thing you can do is to accumulate money:
more coins = more buying power = more opportunities to survive
That’s true only up to a point.
If you accumulate large sums of money, you risk losing it.
What is Money? It’s a Flow.
Take a minute to think back over the past week and how money moved through your life.
You likely went to work and earned money, you may have investments which fluctuated in their balances, you spent money buying things to sustain your life, you may have given some of your money to support someone or something’s need.
Money flows in and out of your life like the air in your lungs.
In order to increase the volume of air you can hold at any one time, you have to work on growing your lung’ s capacity to hold more air.
That’s the same thing with your money -> money must continue to flow in and out of your life but you will grow in your CAPACITY to hold more of it at any one time.
And just like breathing, when the money comes into your life you will take what you need and you will give the excess.
But what happens if you refuse to give the excess?
Let’s first answer – what’s considered an “excess” amount of money.
Money should cover your needs, wants, and offer a degree of security and protection to cover risks.
Since everyone’s situation is different, there’s no defined amount.
It’s entirely up to you to decide what amount of money you need and can give. And the answer right now to how much you can give may be zero.
And if it is zero, then you focus on the factors that go into making that money – your time, your energy, your skills and expertise. You can give those in lieu of money.
The main takeaway here is that:
The act of giving your excess is more important than the amount.
This becomes more apparent when you take accumulating money to the extreme, i.e. hoarding.
There are three ways that hoarding money affects the supply of it and none of these ways benefits you long-term. While these examples are extreme, the principles hold up even at a smaller scale.
- You accumulate all of the money in the system – people who need money to survive attack you and rob you of your money so that they can survive.
- You accumulate all of the money in the system – you lose people to trade with and put your survival at risk.
- You accumulate all of the money in the system – the Government who makes the money just makes more of it and devalues the amount you own.
Hoarding money does not serve you.
So where’s the middle ground? How do you grow your money without hoarding it?
You have to think of money as a self-sustaining ecosystem that has three main parts:
- Making Money
- Keeping Money
- Giving Money
Let’s see how this flows through this ecosystem:
Someone receives money as a gift -> they ask you if they can buy what you are offering – > you sell them what they need -> they pay you (you make money) -> you keep some of this money -> you give an amount to someone (no exchange).
Notice how giving impacts the flow of money. Giving doesn’t rely on there being an exchange of value – giving makes the money immediately available in the system ready to be used in an exchange.
Giving without exchanging is how the flow of money is maintained through the system.
Giving stops the negative effects of hoarding money.
Giving ensures that you can continue to receive money.
But giving must be balanced with the two other pillars of Ecosystem – making money and keeping it.
If you give too much, you will have nothing left to give. All three pillars of the Ecosystem have to work in harmony with one another.
And the more harmony and flow your Money Ecosystem has, the more money it can hold and produce.
Maximizing the capacity and health of this Money Ecosystem is how you ultimately grow your money and grow your impact.
Giving isn’t new – how it relates to YOUR money is.
Watch Meet Your Money Tree for a more detailed explanation of this concept.
Global Giving Practices
I recently learned of a Turkish practice called Askıda Ekmek or “there is bread on a hanger.” The idea is that someone who can afford an extra loaf of bread pays for one and places it on a hook or hanger for someone who cannot afford a loaf of bread – thus helping to sustain their life.
Practices such as these and others that allow you to share your abundance help ensure that the money continues to flow through your life and the Money Ecosystem.
What is Money? Your Next Step
Since money on its own has no value (it’s just a number), if you want to grow your money, you have to reconnect with these three things:
- Your Universal (God-given) value (inherent to all Beings, irrefutable value that exists by Being not doing). This is represented by the value of your time, as time is your original gift.
- Value of your skills, experiences, talents (things you can do or sell in a market)
- Value you place of external things (what you buy)
And then you must:
- Commit to allowing money to flow freely in and out of your life.
- Grow your capacity to hold, steward, and release more money, i.e. become an ever-increasing conduit for larger flows of money.
- Develop your money container and village for support.
When the steps are written out like this, it sounds like a breeze, right?
I know from first-hand experience that it’s not.
Which is why Sustainable Wealth exists – to teach you how to relate to your money differently so that you can grow it and make an impact.
If you’re interested in learning more about how to expand your capacity to hold and steward your money, meet with me to get your action plan and next steps. Book your free discovery call today.