Pay Dirt: 7 Important Concepts To Understand About Money
In my lower-middle-class youth, I was raised to discuss money almost never; money was mostly to be associated with all the evils of the world. As a result of my childhood, I came to hold internal conflicting messages about having money, which made it tough to go out into the world and build abundance.
As I reach the age of fifty, my money intelligence has evolved, of course. I no longer regard money as evil. Just as a gun becomes evil in the wrong hands, so it is with money. How we go about earning it, keeping it, and using it is what truly counts in the end run. Now that may sound elementary, but the implications are many.
I have put together a list of my top thoughts about money. The list cannot be complete with only seven items on it. Nonetheless, here are my top 7 concepts to understand about money:
1. Money is only necessary in case you don’t die tomorrow
Let’s face it, as far as we know, there are no uses for money after death. The people left behind will need it, but the person who has left this life is suddenly very poor, as when they entered this life.
2. Big money will always belong to the elite
I had a teacher in high school that – one very unusual day – suddenly decided to give an eye-opening lecture to my class that seemed to have nothing to do with American History, and yet the class would eventually learn that it had everything to do with all human history. It was pretty clear that this lecture was impromptu; this was not a planned lesson. Besides the fact that this teacher was somewhat physically feared by everyone, the lecture held the hypnotic attention of every student in the room.
The teacher spoke about all people in the world as belonging to only two groups: the “haves”, and the “have-nots”. He went into great detail about the factors that separate the two groups and why. He made us all think about the pros and cons within both groups. And lastly, he demonstrated how these two groups have been the same throughout history and that this division between people – more than any other historical variable – has shaped history.
3. Ignorance breeds poverty while enlightenment breeds wealth
Although the USA – and perhaps India in recent years – has the highest rates of new millionaires per year, that rate has, of course, dropped significantly during the current economic recession.
I read one statistic that claimed there were one million new millionaires in the year 2000 in the USA. The single largest reason that there are so many new millionaires is the availability of information and knowing how to use that information. The largest difference between rich and poor is specialized knowledge.
4. For most people, money goes out faster than it comes in
Need I say much more on this point? The only thing I might add is the obvious: for the rich, the opposite is true.
5. There are four main roads to financial wealth
The easiest way to financial wealth is inheritance.
Another way – which is the most likely – is using the power of compounding interest. Basically, this means saving a percentage of all income and investing it wisely enough to earn a strong return over a good length of time. I wish I had understood this in my youth! It is virtually guaranteed that if a young person saves 10% of all their income and keeps learning about investing wisely, they will not have financial worries in later life.
Yet another way to monetary wealth is starting and building a successful business. This category probably encompasses most of the newest millionaires. Building a successful business is not simple to accomplish, yet it is very possible in this ‘land of opportunity’, especially now that we are in the information age.
Lastly, another path to wealth is to generate one or more ideas that can be sold for a fortune. We have all seen this happen and been amazed (and perhaps a bit jealous or envious).
6. The future will always cost more than today
This is yet another point that I do not need to spend any time explaining.
7. Money is a feeding frenzy without sensitivity
Now, I am not speaking about philanthropy and other instances of generosity. No, I am talking about the so-called ‘rat race’ in the world of making money. Historically, in the physical “brick and mortar” world we have called it the rat race. Perhaps in the newer, Internet or digital world we might call it the “cyber rat race”.
No matter what you call it, the world of making money can be a cold, cold world with more competitors than friends. Online – in the vast ocean of the Internet – it is much like clusters of deadly sharks swirling around in a feeding frenzy. Often there are enough tidbits of food to feed most all of the surrounding life, and yet the fact remains that we are back to the “haves” and the “have-nots” once again.
In closing – and to end on a happier note – I want to add that my financial evolution has suggested to me that “abundance” of money – like abundance in all areas of life – is not an evil at all. For me, abundance suggests that there is enough to share in appropriate ways.
I wish you to “have” abundance across the board in life, and “have-not” hardship of any kind.
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