Merriam-Webster defines money as:
- something generally accepted as a medium of exchange, a measure of value, or a means of payment
Money is a human invention. It is established on the idea that it has an inherent value in a society and it can be used in trade for material, or immaterial, goods and services. It only has this power as long as the society as a whole recognizes its value equally as a means of exchange.
If an individual wanted to buy a car and the car costs $20,000 than both the buyer and the seller of the car have to be in agreement that the $20,000 being traded for the vehicle and the vehicle itself are of equal worth. Both people have to have an equal understanding of the perceived value of money in comparison with the perceived value of the car. If both agree then the exchange is made and the deal is closed.
We as people give money tangibility. We created it and we gave it value. This value might be backed by some commodity (gold, silver, etc.) or its value is declared by a government. In either case, we give it its value or we agree to the value given to it by others.
The currency of empires and cultures from past civilizations could not be used as money in our society today because we as a civilization do not perceive it to be valuable as a means of exchange. It may have value as a collector's item, but I could not walk into a market and buy goods with it in the conventional sense.
I also believe we place on money a personal value. Each person perceives the money under their control in different ways. Some are frivolous while others are frugal. Some obsess over it and others could not care less. Money is ruled by our perceptions. Take a moment and consider how it is that you perceive money.
Money as a Limited Resource
There is only so much money in the world. This is on a grand scale, like the United States economy, and on a small scale, like our personal economy. We as individuals control a small amount of a greater money supply. We compete with each other to control as much of the greater money supply as desired.
We may have barely enough off of which to live, or we may control more than we could spend in one lifetime or multiple lifetimes. Because it is a limited resource we have to determine the best uses for it at any given time.
Money is limited and we determine its value both individually and corporately. Understanding money, more specifically the money we as individuals control, will help us retain, acquire, and use it much more efficiently and effectively.
Put money in its proper place. We are not to be controlled by it, but we are to have control over it.