What is Money?
Updated: Oct 14, 2020
This may seem like an easy question to answer. But when you dive in, it is actually not as easy as you think. If you call it the paper in your wallet, you'd be wrong. That paper in your wallet is actually a RECEIPT or a TICKET that's in exchange for something of VALUE. That paper alone is actually worthless.
Back in the day, that something of value, was GOLD! (and silver). So that paper money was a 1:1 trade for an ounce of gold or silver from the bank. It was just easier in the marketplaces of the world to use these paper receipts for paying for stuff. If you did want to go and trade in that paper for gold or silver in the banks vault, you could! ... but our paper money (called 'fiat' currency) has not been tied to gold or silver since 1971.
And it is one of the largest contributing factors to our current state of affairs economically. Central banks (The big wigs like "The Fed", Bank of Canada, European Central Bank, Bank of Japan, etc. along with their baby banks - commercial banks like BMO, CIBC, TD, Bank of America, Citigroup, etc.) and governments love and hate gold. They love it because it is REAL ACTUAL MONEY - if it wasn't, why do they settle THEIR deals in it? They certainly don't use that worthless paper we all use! - and they hate it because it constricts their spending.
See, back in the day, if governments wanted to spend money, they had to have the gold in the bank to justify SPENDING. But since we have gone off a gold standard - and EVERY single country in the WORLD has - governments can spend whatever they want by literally printing money.
Yes. They just "print" it. Well, some of it is physically printed, most of it is done electronically now. When they print money, they are INFLATING it (that's where that term 'inflation' comes from). And when they inflate it, THEY DILUTE THE POWER OF THE DOLLARS ALREADY HERE.
THIS is why everyday that you work hard, you can never seem to get ahead... because your dollars TODAY, are worth even LESS TOMORROW. Unfair right?
This is why I want to encourage you to look into your own financial education, learn what money really IS, and invest accordingly.
Below is a foundational series I watched that changed the game for me. And gave me the knowledge I needed to build on my education. It is fun to watch, and I am a visual learner so this was an important way for me to learn, and is about 4 hours total of content.
I highly recommend taking the time to watch and learn. Let me know what you found interesting or something you didn't know.
(if for some reason my link isn't working here in the article for you, simply go to your youtube search bar, and type "Hidden Secrets of Money" by Mike Maloney and get started with episode 1!)