For What It's Worth

The Bible tells us that "the love of money is the root of all kinds of evil."  Money is just a medium of exchange -- physical or digital representations of our wealth.  When that becomes more important than worthwhile relationships, it becomes detrimental to our wellbeing.

But that wealth is also representative of our worth.  It is the measure of our physical and mental activity in the community around us.  Our money "pays forward" our work into the lives of our family and friends even as it provides a more comfortable life for ourselves.

Whenever we spend money, we normally "seek a bargain" to "get our money's worth."  In this, we are putting a value on those things that we want, drawing a line beyond which we don't want to cross. If we cross that line, and have to borrow money instead, then we have to rearrange our spending habits and pay extra in the long run.

The way to avoid the "credit" trap is to only spend money you already have.  For most of us, we buy large things -- like appliances, cars and houses -- against a promise that we will continue to make money in the future.  Assuming periodical improvements, this works well enough.  For smaller things, though, buying more than we can afford is a bad idea.

The best course of action for recurring expenses is to always "live within your means."  Money on food, utilities and travel should always from "money in the bank."  That is just "how money works."

This requires us to budget our resources with an eye on keeping money in the bank.  In this way, we might even have enough to let it "make money" for us.  Banks make money by charging more for other folk's money than they pay to keep our money.  The truth be told, the banks actually only have a fraction of the money they have control over; but as long as we aren't "rich," this does not matter much for us.

As soon as enough money is set aside for emergencies, the access acquired should be paid out to businesses that provide goods and services to allow them to stay in business.  This provides funds so that they can grow into larger businesses that are worth more.  When we do this, we become partners, sharing in the wealth that we hope will come.  It is best to buy into companies that pay back periodically, but good companies that increase in overall worth can prove a good investment when the time comes to sell your share to someone else.

If you are getting paid to remain a partner, these payments may be used to buy more of the company.  As you buy more "shares," the growing company becomes worth even more to you.  If at anytime the company begins to fail, selling off shares that still are worth more than they first cost provides funds to be used elsewhere.  Timing is important, so it is probably a good idea to let professional money managers make this decision.

So, What Do I Know?

• Money can get us into trouble.
• Money only represents value.
• "Credit" should only be used for big things.
• We should strive to use only our own money on recurring expenses.
• Excess money should be used to help others succeed.
• Wise investments can one day pay us well.