Rules of the Game
I am beginning a new blog program called The Wealthy You. The intent of this program is to create The Wealthy You. It is being designed in a way that feels like a game. A game complete with rules, offense and defense, and a point or purpose of playing and winning. There is always an incentive to play games, even when nothing is on the line when playing with friends or family, playing a game just to exercise your brain is incentive enough to play.
In todays inaugural post we will go over the rules of the game, the rules that are built and designed for you to see continued success, not just once but every day of your life. The rules of The Wealthy You are fairly simple, they have been known in society for thousands of years. Names may be different and change over the years, but the rules are the same. The rules for our game are the roles that money plays in society. There are three main ones; medium of exchange, accounting of value, and the ability to store value.
Let’s go over all three of them starting with medium of exchange; most people understand the exchange part of money, that is shopping. We all shop for things everyday. We buy groceries, cars, homes, appliances, clothes, heat and cold, electronic devices, tools, gardening equipment, and entertainment because we need them and we want them. Without the use of a medium of exchange, exchanging would be trading or bartering. We would trade our cows for someone else’s horses, for example. What would you trade for someone else’s land or house. What could you trade for someone else’s labor to do something that you may not be good or effective at doing. You would have to trade something of value, money becomes a generic means of exchange that everyone would accept for payment. Not everyone would accept a horse in exchange for groceries, but grocery stores will accept money in exchange for their groceries.
The next rule and role of money we will cover is the ability money has at accounting value of assets or liabilities. Without money how could you say Elon Musk is worth over $200 billion dollars? Without money how could you say the least productive people in society are worth nothing? Our worth would be found in our ability to find food and shelter everyday. It is quite possible that we would all be living underneath rocks each night instead of in a bed each night without money. Everything you see in society has a value, and money will put a numerical value on that thing you see, this can include real estate, stocks, bonds, collectibles, items on store shelves, cars, businesses, franchises, professional sports teams and anything else people will produce in society will have a corresponding value attached to it. Money will account for that value.
The last rule and role of money is the ability to store value. We do things and stay productive, we work, we serve the people, we all do things for an income to support our life and to be happy and healthy. What we do with that income when it finally falls into your lap is the important work. You receive your income, then you pay yourself, pay your other bills, and then what do you do with the extra income that hasn’t been spent yet? A lot of people would use that extra income to acquire liabilities, this will lead to a feeling of living paycheck to paycheck. This includes a new car and car payment, maybe another car with a corresponding car payment, maybe a larger house, credit cards and personal loans. This is effectively storing your extra money in liabilities, things that drop in value or take money out of your pocket. Money can also be stored in real estate, stocks, bonds, collectibles and anything you can find that will put money in your pocket or rise in value, those are called assets. Assets are ultimately what you should want to own, not liabilities.
Remember to keep the roles of money in your mind every time you have made the decision to make a financial transaction, that is how the rules of The Wealthy You are to be followed. There is nothing in the Universe that can replace the role of money in society, use it to your advantage.
Every friday will be a new blog post that expands upon this game. Next week we begin The Wealthy You – Defense.
Become The Wealthy You