What is money?

Probably the most basic of basic things we can ask about money is ‘what is it?’.

The answer is simple, isn’t it?  It is the notes and coins we carry around and use to buy stuff.  Yep, that’s it…that’s certainly money.  But what about the money that you can’t touch, the number on the screen when you look up your bank balance, the money that moves when you buy something with your contact-less card?

That’s all money too…but it is also a clue to the fact that ‘what is money?’ isn’t quite such a simple question after all.

A shared belief

The notes and coins we are familiar with aren’t actually valuable at all.  Look closely at a £10 note, just under ‘Bank of England’, you will see the words ‘I promise to pay the bearer on demand the sum of ten pounds’.  So, your £10 note isn’t actually ten pounds at all, but I guess, when you think about, it is stupid to think that a bit of paper (or plastic these days) could be worth so much!

Imagine an alien landing on earth in a swanky, shiny spaceship and one of us humans approaches him and offers him a pile of little bits of paper for his high-tech transportation device.  Do you think the alien would accept this and think he’s got a good deal.  Of course he wouldn’t.

Our notes and coins are only valuable because we all believe the same story about the money.  Money is just a belief system that falls apart as soon as people question what the value really is.

Just a story

Entrepreneur and blogger, Seth Godin, says money is just a story we tell ourselves.  Beyond acting as a method of exchange that allows us to get the things we need, money isn’t real it is just what each of us believe it to be.  We each tell ourselves different stories about what it means to us, what it allows us to be or do, how happy it makes us, how much is makes other people like us.  These stories form the relationship with have with money – some healthy, some not.

The story that the consumerism-driven society of today wants us to believe is that more money = more stuff = more happiness.  But numerous studies show us that this is simply not true. Constantly striving for more is less likely to lead to a meaningful and well-lived life.

Take some time to think a bit more deeply about money.  Be aware how abstract it all is.  Know that by changing the story you tell yourself about money you can change your relationship with money, and perhaps change how money makes you feel.


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