Misconceptions about Money
For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
Hello and welcome to another issue of my newsletter.
Today we go through some wrong beliefs people have about money. These beliefs aren’t the fault of people who hold them, they are usually passed from one generation to the next based on the previous generation’s interaction and societal beliefs on money.
Some erroneous assumptions about money include:
Money is the root of all evil
Money is to be spent.
Money is not important.
Money is gotten either by luck or through dubious means.
For a person to be rich, another person has to be poor.
Money is a scarce resource.
All these are limiting beliefs that prevent one from seeing what money truly is.
In finance or economics class, money is said to be anything that is generally accepted as a means of payment for goods and services and payment of debt.
Let’s go down memory lane. In the olden days; people exchanged using trade by barter. Please do this for me and I’ll do that for you, a cow for 50 chickens. Next was the use of commodities like silk, wool, iron, silver, gold, then coins, and it continued till paper (cash) was made.
Paper money was first used in China some 500 years before it was used in Europe. In the 17th century, European counties started producing paper money due to a shortage of coins.
Generally, paper money (dollars) always had a relationship with gold. However, in 1971, President Nixon severed the direct convertibility of U.S. dollars into gold. World currencies stopped being backed by gold because much of the world currencies relied on dollars, and with that, fiat money became the money we know today.
Fiat money is money that isn’t backed by any physical commodity. It is just an arbitrary act or decree that makes it acceptable as money. Paper is what we spend like money, so why be scared of paper? It is meant to be a tool that helps us store value.
Below are refutes to the above-listed misconceptions:
Money is the root of all evil: A tool is neither good nor bad. It is a means to an end. It is what you use the means to do that matters. Money has never been the devil because it is a tool. How you use it is your responsibility. It only amplifies the kind of person you are.
A reasonable person will use the money to do more good, so will an evil person do more evil.
People often say money is the root of evil to appease themselves and feel a kind of “holier than thou.”
What’s more interesting is that such people in an act or pretense to behave that way are misquoting the scripture.
For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. -Timothy 6:10 KJV
Like any object, it’s love or more accurately an unhealthy obsession that leads to eventual destruction. Remember, it is the love of money and not money itself.
2. Money is meant only to be spent: Yes, but no, not all the money you earn is intended to be spent. Some you spend, some you save, invest and others you give away. How would you fare without having to work again due to your illness or old age?
The money you earn should be used as seeds to build your wealth-create cash-generating assets like equity, real estate, etc.
3. Money is not essential: Whoo, I’m sure you are looking like, “Is this even true?” Well, some people don’t see money as something important. I agree that it should not be that important in the real sense, but how do you eat a decent meal? Keep a roof over your head, take care of your health, and travel?
You need money. There is no way you dodge money. Money problems like these questions are solved with money. Therefore money is not unimportant. It is as important as a hammer for driving a nail. Meaning it is only important for serving as a tool to solve problems.
4. Money is gotten either by luck or through dubious means: If Bill Gates never wrote those codes, how do you reckon he would own Microsoft? Would he be that rich? Get up and show up. There is enough for us all. Do the work and see your star shine.
Luck is something random, but money hardly comes through luck. If it does, it also goes by luck. This is the case of lucky gamblers who earn millions, and within few years, they are back to where they started or worse off.
Every rich person works hard for their money. Those who have money through inheritance still have to keep working to preserve the money or it finishes.
There is an exception for those that are corrupt and cut corners; they don’t deserve it.
5. For a person to be rich, another person has to be poor: Listening to Naval Ravikant on his podcast talk about the zero-sum game was a game-changer. Status is a zero-sum game. A zero-sum game is a game where all the inputs equate to zero. Forces cancel out the effect of each other.
Money or wealth is not a zero-sum game because for you to be rich, someone doesn’t have to be poor.
There is enough money for us all
6. Money is a scarce resource: This is a fat lie. There is money enough for us all. This statement has been repeated because of its importance. Understanding that there is always abundant money when you do the right work. This is evident in today's world as the average Joe in most countries has more money than his counterpart some seventy to eighty years ago.
The world is becoming richer, and you too can.
Videos
Is your Thinking Keeping you poor - Douglas Kruger PS: There is a wheelbarrow analogy that is interesting and it’s good if you watch the video.
And that wraps it up for the week, see you next Sunday.
Great post. I like your take on #1 - actually I hear people misquote this all the time! The fuller biblical quote is "the love of money is the root of all evil." Big difference!