Money is medium of wealth not a source.

All started with a normal usual question: why too much saving and too much spending cut off are not leading me anyway better in life, but worse?

Do you believe saving is the best way to build a wealth? Or even is the way for a more stable financial life? I am going to walk you through thoughts developed in my head one cool night in my bed before falling asleep.

The answer came in an easy simple way, there is a volatility in money’s value, you saved 1000$ today, tomorrow its value will not be more than 900$, so keeping the money away from your hand into your bank account doesn’t mean you are not spending. Lier! I came the next day and found my net balance 1001$, I am earning you are misleading.

I am asking you about the real value of your money, have you ever heard of someone since the dawn of currency issuing who had 1 unit of currency could have exchanged in favor of some product or service and his\her grandchildren is able to get the same value \ product or service by the same 1 unit of the currency? Assuming living in the same homeland, surely not, and the reason is money’s value always going down for many causes to be discussed in separate topics.

To get it with physical sense, think of some hot air (money) containing energy (value), If someone decided to get some energy by somehow capturing that hot air into a control volume, time passing WOW! Now heat is gone, and air becomes useless and hence with no value, whatever the effort you do to insulate that controlled volume for the sake of keeping the air hot, there would always be losses and you will get the same result. But if you want to store that energy, you transfer it into a savable stable form like chemical bonds.

I say money in its simple direct definition is the medium in which value transactions take place. To make it more obvious, ask yourself what is the use of money? Technically we use money to purchase items, services, and things of value, you can’t eat it, drink it, or burn it to get energy, that wouldn’t be the optimal use of money. now you understand what money is, and how it works? Once you change your conceptualization of money you will change your actions and decisions towards it, maybe you will understand it more.

Ok, if it is not money that keeps people rich, then what about those families living in the shadow known for still staying in power for long times? More important how they reached there in the first place? That’s what we will cover in the next time. Leave me a comment and tell me what you think about my thoughts, I am open to discussions. Have a good one! Stay tuned.

Ahmed