It’s our ticket to the outside world, the thing that keeps the lights on in the night, and the stuff we never have enough of. But what is it?

In the physical reality, it’s just a piece of paper with green ink. It has no functional, physical use in society. You can’t eat it. It would be miserable to wear. You can’t build shelter with it. Would you stuff your pillow with it? Heck, you wouldn’t even wipe your butt with it.

At the same time, we all understand that money is valuable in the conceptual reality. We all see that you can trade this physically worthless piece of paper for food to eat, for clothing to wear, for a home, for a pillow, and for toilet paper.

In order to understand this conceptual value of money, lets start by looking at a world in which money doesn’t exist. In this world, virtually everything is the same. Humans still have all their basic needs like food, clothing, and shelter. We could also expect they would like extra comforts like heating, air conditioning, and entertainment. So, how do they acquire these needs and comforts?

They have to produce them.

Could you imagine living in a world where you had to produce everything that you needed or wanted? It would be extremely labor intensive, everything would be produced at a lower quality than you enjoy now, and many things would just be impossible. Well, the humans in our fictitious world don’t like that idea either. So, they start to specialize in one area of production and begin to barter (trade) with one another.

We have a cattle farmer, trading with the wheat farmer, one steer for one year’s worth of wheat for his herd. Everything is great so far. But the next day is the cattle farmer’s wife’s birthday. He wants to get her a pair of earrings; so, he goes to the jeweler.

Now, how does the trade take place? The value of a full steer has a higher demand/value than the pair of earrings. To make this work, the process of doing multiple trades to acquire multiple smaller products, is just too complicated.

What if the jeweler didn’t want the steer? How would the steer be separated amongst the jeweler’s employees? The process is just too complicated on a large scale. But, the humans on our new world are smart. They discovered that they could use another valuable item to serve as a “medium of exchange”. Thus begins the concept of money, something that you can price products and services in that is determined through market demand.

In our real world, gold served that role for 5,000 years. That officially ended in 1971, but that is the topic for another day.

So what does any of this have to do with you?

I emphasized the words produce, production, and products. “Production” being the concept of creation, “produce” being the action, and “products” being the end result. When it comes to personal financial management; your income, expenses, assets, and debt are the sum of your productive value to society. Money only plays the role of measuring that value.

• Your paycheck is a credit of productive value you input to society from your labor (even trade)

• Your bills and personal spending is the withdrawal of productive value from society (even trade)

• The value of your assets are a surplus of past productive input

• Your debt balances are a deficit of your past productive value

I like looking at Money this way because it provides a true perspective of the dynamics at play regarding our personal financial management. When we spend more than we earn, what we are actually doing is taking the productive value created by other people in society without replenishing it. Of course, society isn’t just going to let you do that. They will make you earn it back in the form of debt.

Debt is a voluntary form of slavery…

Using our new perspective on Money, we can put 2 and 2 together and see that debt is society’s claim on our future productive value. We have to go to work, to get a paycheck, so we can pay society for something we have already withdrawn from it. We have to do that every month. It’s like having to do the dishes for a couple hours to pay the restaurant for the meal you ate. That is exactly what happens when you pay for your meal with a credit card.

Most people live paycheck-to-paycheck because of this. 100% of their paycheck goes to other people in society through overconsumption of basic needs and comforts. They’re forced to go to work to pay someone else. They never make an effort to Pay Themselves.

That’s what we at AMP FC do. We help people understand this perspective of money so they can get themselves out of this slavery they created. We help people change their Money process to start Paying Themselves, paying off debts, and start accumulating surplus productive value in the form of assets.

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